One thing to consider is that an examiner will review decline reasons against your loan policy. So, if you don't have something in your loan policy addressing this issue, consider adding it to policy now.
Then, if the same situation comes up at a later date, you already have in policy how to handle it. And when the examiner asks if your policy supports the decline reason, you can say "Yes."
Chances are, if this is something that would cause you to want to decline a loan now, it will cause you to want to decline a loan six months from now.
I know that we have had to amend our policy now and again because it seems that people come up with new and inventive ways to be "flaky."
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CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'