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#204905 - 06/28/04 12:52 PM When is an app and app?
Anonymous
Unregistered

I have to post anon because I'm embarrassed to ask this question. With both mortgages and equities, when is an app and app? Meaning, if the customer calls for rates, tells us they have a property maybe? Or if they mention an amount and term? Do just those terms mean an application or can we require once we receive something in writing. I'm concerned because I need to ensure whenever an app is considered an app, that early disclosures go out. Help! Thanks.

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Lending Compliance
#204906 - 06/28/04 02:27 PM Re: When is an app and app?
KSalberta Offline
100 Club
KSalberta
Joined: Jan 2003
Posts: 150
GA
I don't know why you would be embarrassed. What with all of the changes to various regs and slightly different definitions for applications in several of them, confusion is natural.

The key under RESPA is getting the customer's financial information "in anticipation" of a credit decision, and this to me is triggered not by the customer asking for a quote, or a question about a particular property, but going through your application processe and giving info like their current income/salary, bank accts, etc. This could be written or oral, and if a loan officer has a written application on file from a previous transaction that they then pull and update or confirm over the phone while giving a quote, that to me triggers the early disclosures.

The definition is below.

Kathy


For early disclosures under RESPA (HUD X) this is the definition:
3500.2(b)
Application means the submission of a borrower's financial
information in anticipation of a credit decision, whether written or computer-generated, relating to a federally related mortgage loan. If the submission does not state or identify a specific property, the submission is an application for a pre-qualification and not an application for a federally related mortgage loan under this part. The
subsequent addition of an identified property to the submission converts the submission to an application for a federally related mortgage loan.

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#204907 - 06/28/04 02:58 PM Re: When is an app and app?
Anonymous
Unregistered

You can also look under Regulation B... basically if all you are doing is providing loan product or qualification information then you are merely handling an inquiry.

However, if you critique and communicate your analysis back to the caller then you have probably changed the call from an inquiry to an application.

For example, advising a caller that your interest rates are 6% is an inquiry.

Advising them that the bankruptcy they told you about would make them ineligible for a loan with your bank would be considered "taking" an application.

Best of luck..

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#204908 - 06/28/04 03:07 PM Re: When is an app and app?
Deena Offline
Power Poster
Deena
Joined: Nov 2000
Posts: 2,701
PA
Quote:

The key under RESPA is getting the customer's financial information "in anticipation" of a credit decision




Remember, RESPA also requires the identification of a specific property in order to have an application.

Application means the submission of a borrower's financial information in anticipation of a credit decision, whether written or computer-generated, relating to a federally related mortgage loan. If the submission does not state or identify a specific property, the submission is an application for a pre-qualification and not an application for a federally related mortgage loan under this part. The subsequent addition of an identified property to the submission converts the submission to an application for a federally related mortgage loan.
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#204909 - 06/28/04 09:42 PM Re: When is an app and app?
Anonymous
Unregistered

DUH!! Boy do I feel stupid..I missed the whole part about the "early disclosures".. I gave my opinion on the 'when is an app and app" in general... OUCH.. I guess that is what I get for giving my opinion before my first cup of coffee.. I agree with Deena... remember once the address is provided the clock will start to click... best of luck...

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