Situation:

Home loan application received 12-5-14, earlies and Notice of Incompleteness (requesting copies of income, bank statements, etc) sent out 12-8-14. NOI notes items must be received within 20 days or file will be closed. LO keeps in contact with applicant but does not receive the requested items by 12-28-14. On 1-22-15 the applicant calls the LO and says the deal fell through and no longer needs the loan.

Is this coded "withdrawn" using 1-22-15 since we didn't have all the information we needed to make a credit decision? Is it coded "closed for incompleteness" using 12-28-14 since that was the date we gave them in the letter? Closed for incompleteness on 1-22-15? Other?

Since the "expiration" of the NOI date occurred, I would call this "closed for incompleteness" and use 12/28/14 as the action date. It's documented and easier to defend. If you choose "withdrawn" and 1/22/15, some examiners might disagree .

That makes sense. Thanks, David!

On 1-22-15 the applicant calls the LO and says the deal fell through and no longer needs the loan.

Why did the loan "fall through"?

Never mind - I first read it that the loan officer told the applicant the deal fell through and they no longer needed the info.

In a case like this one, incomplete application, a request is sent, with no response, how is that reported on the LAR for income? Where is the guidance for that? I know the action taken is 5, but what about any incomplete data? THank you.

From Getting it Right: p16. Also, Appendix A, ID: "If no income information is asked for or relied on in the credit decision, enter "NA."

Before using NA you may want to read my rant in this post.

http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1607614&page=2

I am not able to access the 'rant' link as the page states Access Denied. Is it just me?

It works OK for me but here's the rant:

First and foremost you should be talking to your examiner to see how they are interpreting this.

We never consider LP to be our decision (it's been this way for the last 10 years here and has always passed previous exams). LP just told us the loan was eligible to be purchased. We then would begin our underwriting process in notifying the applicant what information was needed to finalize our decision and then once we received the information proceed with the underwriting and approval process. If the applicant withdrew the application before we sent them the letter approving the loan subject to we would treat is as a withdrawal and report the income as NA since we had not made a credit decision.

They are saying LP is the conditional approval and once we run the information through LP we had conditional approval. For the record I do not agree with this and I was ready to bump it up the ladder over the field examiner and district supervisor's heads but my board Chairman overruled me.

They also claimed you cannot report NA for income on withdrawals if the application has been through any "evaluation" process prior to the withdrawal. They based this "opinion" on the following from the Commentary to 203.4:

6. Income data—income relied on. An institution reports the gross annual income relied on in evaluating the creditworthiness of applicants. For example, if an institution relies on an applicant's salary to compute a debt-to-income ratio but also relies on the applicant's annual bonus to evaluate creditworthiness, the institution reports the salary and the bonus to the extent relied upon. Similarly, if an institution relies on the income of a cosigner to evaluate creditworthiness, the institution includes this income to the extent relied upon. But an institution does not include the income of a guarantor who is only secondarily liable.

Although I countered with the following from the GIR:

6. Income. Enter the gross annual
income that your institution relied
on in making the credit decision.


Because the Reg supported their position they are ignoring the GIR. I can assure you if the GIR supported their opinion they would ignore the Reg.

I do not nor have I ever agreed with this opinion but not much I can do when the Chairman of the Board interrupts and commits to making the changes.


I just noticed this is in the private section therefore if you do not have access to it you would not be able to access the link.

I got in. It's in the Private forum. You might want to check with the BOL Administrators, if you're a banker.

Thank you, David. I will look into it.

I read your "rant" post, Dan. I agree with you about NA on income. It's too bad you were cited for doing what the regulation states. Not that it matters to your exam now, but here's what I state when someone makes a statement like your examiner did:

"The commentary, FAQs, staff opinions, etc. cannot contradict the regulation. They can only add to the regulation and provide explanation for the gray areas."

The GIR is basically a summary of all guidance issued on HMDA. What your examiners quoted is true. What you quoted is from Appendix A and is also true. They both state "relied on". What they quoted does not say you ALWAYS report income. It says to report income IF you relied on it.

I totally agree David and as I said I was prepared to take it to Chicago and then to Washington if needed but when your Chairman buts in and agrees to the change there's not much you can do.

BTW, at the time (2011) the Chairman had only been in the chair for about 6 months and that was his first exit interview. I don't think he understood what was happening at the time and that my job is to get confrontational and escalate it when the bank is being improperly cited for a violation and the examiners won't listen to reason.

Anyway that's in the past and our end of 2013 and first of 2014 exam went without any hitches other than one procedural issue and a Chicago ruling agreeing with my interpretation on a RESPA issue.