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#1997484 - 02/23/15 06:49 AM Fair Lending? ECOA? TILA Reg Z? - Causes to Deny??
pskadot671 Offline
Junior Member
Joined: Jan 2013
Posts: 27
I'm torn between the Regs and wanted to obtain any thoughts or citation with the following or where to read up on how to address this concern. Below is the issue at hand.


"Applicant submits an application for an unsecured loan. During the interview process the applicant mentions that a portion of the amount being requested for is for relocation expenses in the coming months and that the applicant would be currently unemployed a that time and has no job lined up at this moment."

A review of all pertient information provided at the time the application was submitted reveals that the applicant qualifies for the loan being requested based on the underwriting guidelines.

ISSUE AT HAND:
With the disclosed information provided and can the Bank deny the loan. Issues at hand is the repayment ability of the loan and whether the application can be considered knowing that there is the potential of the loan going bad.


Applicant applies for a loan and meets all the underwriting criterias and qualifications (Fair Lending, ECOA, TILA)for the loan, no decision has been given as of yet as it just within the day.


Quesion: "If a applicant discloses abount the relocating in a few months verbally and may not have a job, can the bank decline the loan knowing that the applicant may not have he same income in the future?

Torn between reqs.

Any help would be great.

psk

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Fair Lending
#1997485 - 02/23/15 10:44 AM Re: Fair Lending? ECOA? TILA Reg Z? - Causes to Deny?? pskadot671
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 80,370
Galveston, TX
Of course you can deny the loan. I am confused as to why you think it is a problem?? Isn't one of you standard questions whether or not there is going to be any anticipated change in income??
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#1997495 - 02/23/15 02:19 PM Re: Fair Lending? ECOA? TILA Reg Z? - Causes to Deny?? pskadot671
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,460
Florida
The idea for the loan is repayment, and the customer indicated that they will be moving from the area and unemployed.

The LO (like rlcarey mentioned) should have picked-up on the moving/employed statement and asked how the applicant will repay the loan when (s)he is not working. I hope it was a junior loan officer filling in. They need training, or else the bank may be making loans on imperfect information.
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