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#2034142 - 08/18/15 02:38 AM Re: HMDA LAR Code for Withdrawn VS Approved, not accep Donna Avery, CRCM
Beagles22 Offline
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State of confusion
Just adding my 2 cents, our online application process includes the client getting all disclosures, but in no way indicates any sort of underwriting has been done. If this had come electronically or over the counter, we give out disclosures first as not to miss that deadline. No sort of approval or underwriting has been done normally. If the client withdraws prior to us reviewing and approving (conditionally or not) we would code as withdrawn. Once we had underwritten and started moving ahead with the process, if they later pulled out, we'd code ANA. Just completed a full Compliance exam and the FDIC was pleased with this process and they did look at our withdrawn files to discuss how we decide that designation. Like I said just my 2 cents.
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#2034155 - 08/18/15 12:33 PM Re: HMDA LAR Code for Withdrawn VS Approved, not accep David Dickinson
RR Becca Offline
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out of the frying pan...
Originally Posted By David Dickinson
Originally Posted By RR Becca
I think there's a big difference between accepting an application and issuing a GFE (i.e. "OK, Mr. Borrower, looks like you've got the 6 pieces of info here that we need to get started with, so let me tell you about the terms we could offer if everything checks out.") and approving or commiting to a loan, conditional or otherwise (i.e. "Hey, Mr. Borrower, we've done all our calculations and you are approved for this loan as long as the appraisal and title work come back OK.")

Welcome to the "party" Becca! smile
I'm a little confused by your first sentence. If you accept an applicant that meets the definition in RESPA, you MUST issue a GFE. You have 3 days. How can there be a difference?


I apologize if I was unclear. I was trying to illustrate the difference between the application/GFE phase of the process (at which point NOTHING has been done except take the applicant's most basic info and maybe run a credit report) and doing the actual underwriting/verification phase of things. I simply do not see how it is possible to have any kind of approval, conditional or what-have-you, prior to that second phase. If that is what the language you quoted from the FR is intending (which I'm still not quite convinced of), it's an absolutely absurd expectation.

Of course, as we all know, being absurd does not mean it isn't true in the world of regulation. smirk

I am enjoying the discussion here and am very interested to see where it eventually ends up!
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#2034159 - 08/18/15 12:44 PM Re: HMDA LAR Code for Withdrawn VS Approved, not accep Beagles22
David Dickinson Offline
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Originally Posted By Beagle Queen
. . . our online application process includes the client getting all disclosures, but in no way indicates any sort of underwriting has been done.

So my question is how does this meet the RESPA requirement to conduct preliminary underwriting prior to issuing a GFE?

Quote:
If the client withdraws prior to us reviewing and approving (conditionally or not) we would code as withdrawn. Once we had underwritten and started moving ahead with the process, if they later pulled out, we'd code ANA.

Perfect! That's what the HMDA FAQs say is correct.

Quote:
Just completed a full Compliance exam and the FDIC was pleased with this process and they did look at our withdrawn files to discuss how we decide that designation. Like I said just my 2 cents.

I'm happy to hear this - really. However, I still don't know how your first statement (and my first question) meets the requirement of RESPA.
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#2034162 - 08/18/15 12:50 PM Re: HMDA LAR Code for Withdrawn VS Approved, not accep RR Becca
David Dickinson Offline
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Becca: I understood what you meant, but thanks for the clarification. My point is how does your process of "nothing has been done . . . to underwrite" meet the RESPA requirement to conduct a preliminary underwriting prior to issuing the GFE.

You said "If that is what the language you quoted from the FR is intending (which I'm still not quite convinced of), it's an absolutely absurd expectation." So let me ask: please explain what all of the 11/17/08 FR statements about preliminary and final underwriting mean?

[quotepOf course, as we all know, being absurd does not mean it isn't true in the world of regulation. smirk[/quote]
LOL smile
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#2034175 - 08/18/15 01:11 PM Re: HMDA LAR Code for Withdrawn VS Approved, not accep Donna Avery, CRCM
RR Joker Offline
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It simply boils down to this. Until we can all get on the same page with the following, we will never agree. wink

"because HUD/Bureau uses a 'term' called 'underwriting' which can mean any number of things"

No different than us bankers interchanged 'approval' and 'commitment' all day long...Same way we interchange 'refinance' and 'renewal' all day long. smile

The last one, by the way, drives me BONKERS! laugh!
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#2034176 - 08/18/15 01:12 PM Re: HMDA LAR Code for Withdrawn VS Approved, not accep Donna Avery, CRCM
RR Becca Offline
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out of the frying pan...
Sorry, but I'm in Randy & Truffle's camp on that quote. I think the context of the surrounding sentences (which I'm not going to quote again because Randy has already laid them all out) renders the meaning of that sentence to be that you cannot change the terms of the GFE based on underwriting that occurs after it was issued (barring a qualified COC, of course), NOT that you must have underwritten and decisioned the loan prior to issuing the GFE. "Relying" on the 6 required pieces of info and maybe the credit score to determine whether or not you have a product to disclose terms on is not the same thing as underwriting.

And besides, HMDA rules govern W/D vs ANA, not RESPA or Reg B. I actually had that argument with our Fair Lending consultant less than a month ago. But that's another topic. smile
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#2034177 - 08/18/15 01:13 PM Re: HMDA LAR Code for Withdrawn VS Approved, not accep RR Joker
RR Becca Offline
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RR Becca
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out of the frying pan...
Originally Posted By RR Joker
It simply boils down to this. Until we can all get on the same page with the following, we will never agree. wink

"because HUD/Bureau uses a 'term' called 'underwriting' which can mean any number of things"

No different than us bankers interchanged 'approval' and 'commitment' all day long...Same way we interchange 'refinance' and 'renewal' all day long. smile

The last one, by the way, drives me BONKERS! laugh!


AGREE. ARGH! mad

grin
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#2034178 - 08/18/15 01:17 PM Re: HMDA LAR Code for Withdrawn VS Approved, not accep RR Joker
David Dickinson Offline
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Central City, NE
Originally Posted By RR Joker
It simply boils down to this. Until we can all get on the same page with the following, we will never agree. wink

I agree!
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#2034181 - 08/18/15 01:28 PM Re: HMDA LAR Code for Withdrawn VS Approved, not accep RR Becca
David Dickinson Offline
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Central City, NE
Originally Posted By RR Becca
Sorry, but I'm in Randy & Truffle's camp on that quote. I think the context of the surrounding sentences (which I'm not going to quote again because Randy has already laid them all out) renders the meaning of that sentence to be that you cannot change the terms of the GFE based on underwriting that occurs after it was issued (barring a qualified COC, of course), NOT that you must have underwritten and decisioned the loan prior to issuing the GFE. "Relying" on the 6 required pieces of info and maybe the credit score to determine whether or not you have a product to disclose terms on is not the same thing as underwriting.

Don't be sorry. I understand what you're saying and you can have a different opinion than me. As Joker stated, it's a term that we don't have a solid definition.

Let me ask for clarification if I can. Please read page 68278 and 68279 of the 11/17/08 FR and then answer these 2 questions:
1. Do you agree that RESPA requires preliminary underwriting prior to issuing a GFE? (whatever that means to you)

2. If so, what is "underwriting" as used in the RESPA final rule?

You said I think the context of the surrounding sentences . . . renders the meaning of that sentence. Your addressing 1 sentence. I quoted over 10 and several that are even more direct about the requirement, in my opinion.

Quote:
And besides, HMDA rules govern W/D vs ANA, not RESPA or Reg B.

I agree, but if you agree that you must conduct a preliminary underwriting, then this leads to a decision. HMDA says if you made a decision, you can't call something withdrawn. That's the connection - again, in my opinion.
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#2034201 - 08/18/15 02:14 PM Re: HMDA LAR Code for Withdrawn VS Approved, not accep Donna Avery, CRCM
RR Becca Offline
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RR Becca
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out of the frying pan...
OK, that's more than I can do off the top of my head, so I will have to check back in later when I've got time to line all that up and lay it out. Right now I'm eyeball deep in the desperate struggle to get our LOS ready for TRID while simultaneously doing the July loan reviews and fielding branch and doc prep questions. I will try to carve out some time later today, though. This will make a nice disctraction when I start getting stabby in the course of normal daily operations. wink smile
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#2034430 - 08/19/15 03:20 AM Re: HMDA LAR Code for Withdrawn VS Approved, not accep David Dickinson
Beagles22 Offline
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State of confusion
Originally Posted By David Dickinson
Originally Posted By Beagle Queen
. . . our online application process includes the client getting all disclosures, but in no way indicates any sort of underwriting has been done.

So my question is how does this meet the RESPA requirement to conduct preliminary underwriting prior to issuing a GFE?

Quote:
If the client withdraws prior to us reviewing and approving (conditionally or not) we would code as withdrawn. Once we had underwritten and started moving ahead with the process, if they later pulled out, we'd code ANA.

Perfect! That's what the HMDA FAQs say is correct.

Quote:
Just completed a full Compliance exam and the FDIC was pleased with this process and they did look at our withdrawn files to discuss how we decide that designation. Like I said just my 2 cents.

I'm happy to hear this - really. However, I still don't know how your first statement (and my first question) meets the requirement of RESPA.


I guess what I was trying to say is that we gave the FDIC withdrawn HMDA files, that had disclosures in them, and they were fine with that. We told them we don't underwrite at all prior to sending out those initial disclosures because it isn't feasible and they were also fine with that. I was just trying to give my banks experience to the original poster regarding their question.
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#2034462 - 08/19/15 01:24 PM Re: HMDA LAR Code for Withdrawn VS Approved, not accep Donna Avery, CRCM
swiggles Offline
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I'm sure everyone posting here is aware of differences in examiner views from exam to exam. That is what I hate...that what was ok with one team gets slammed by the next. Or external auditors don't have issues but examiners do...or vice versa.
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#2034483 - 08/19/15 02:02 PM Re: HMDA LAR Code for Withdrawn VS Approved, not accep Donna Avery, CRCM
David Dickinson Offline
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I understand Beagle. My first question still remains:
"How does this meet the RESPA requirement to conduct preliminary underwriting prior to issuing a GFE?"
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