We offer a prequal program. If during the application process, we either would prequal them as approved with contingencies or deny if credit is an issue. For those applications that we don't either approve or deny right away - due to the fact we may be waiting for something - we send out 30 day letters to ensure we don't violate Reg B. It's my understanding that if we approved these we wouldn't have to but if they end up denials than we would. Since we don't know we just do 30 day letters. Is anyone else handling it this way or am I missing something here. We have a new loan officer and he says "we are the only bank he has ever heard of that does this"!

On the face of your post, I'm tending to agree with the new LO.
Sounds like you have a preapproval program because you're approving or denying. A prequal is more of a warm fuzzy if/then letter, not a review of credit resulting in an approval or denial. I suggest you go back to the GIR and review the section on preapprovals to determine if you've overstepped the prequal line.

Yes, I was just going to ask if you are actually underwriting. The actual credit approval is the differentiator between a prequal and a preapproval.

I'm sorry but whats GIR?????

Never mind!!! I figured it out - just a little slow this morning!

So lets talk pre qual vs pre approval. On a pre qual, the loan office only accepts verbal information from our borrower, but they do pull credit and run LP prior to issuing a pre qual letter. On a pre approval, we have our underwriter review all the factors and we collect paystubs etc.

Luv2run - thats how our pre qual program works. We don't have a preapproval program.

My newest problem is - took a pre qual application - gave customer a pre qual approval letter so they could go look for property. After 45 days borrower shared information that would of caused us to deny them at time of pre qual application. What is my timeframe here for sending a denial letter?

Our prequal letter stipulates that we have a right to terminate in the event of material adverse change in circumstances etc etc. Once the borrower comes in to make a final application, we will evaluate for any changed circumstance at that time. Should the information change and they no longer qualify, that is the point we would issue an adverse action. We just rolled this out yesterday so this is what we are planning to do anyway. We are trying to move away from preapprovals given the impending changes and all the gray surrounding the Loan Estimate and preapprovals. You may need some more experienced guidance here.
And I don't know what GIR is ?

No matter what you call your program, if your underwriter is reviewing factors, you most likely have a preapproval program.

You're saying things like you 'gave a customer a prequal approval letter' which is further confusing the issue, imho.

I suggest you read this from the FRB to help get a handle on your program and questions.

Thank you Truffle Royale. After reviewing the information you provided, I feel comfortable with our process but do want to tweak a thing or two.