We have joint applicants that have applied for a mortgage. One of the applicants has a prior bankruptcy and no current credit. However, the other applicant can qualify for the loan by themselves. So do we need to provide an Adverse Action Notice to the applicant that does not qualify, correct? Or is this technically a counteroffer they are accepting?

The applicant that qualifies may accept the counteroffer and if they do consummate the loan no AA was taken against them, however there was AA taken against the applicant that did not qualify and they would be entitled to an AAN.