If a Loan Estimate is provided, but the applicant has not returned the Intent to Proceed within 10 days, should we be treating it as an incomplete application, which means following up with a request for additional information notice per Reg B? Technically, we can't proceed (make a loan decision) without the Intent to Proceed, so it's basically in a holding bucket.

Bump

Mel, NOIA is under Reg B, not TRID, so you should follow your current NOIA process. IMHO.

You have a complete application, so you probably shouldn't use that reason. Why can't you just call them and solve the mystery? The borrower will either express an intent or withdraw and then you'll know. That's what I would do anyway.

It doesn't make sense to send an NOI, since we can't require information or charge fees until we know they intend to proceed. If the idea behind providing an LE is so the consumer can shop, is it really necessary to contact every consumer that was provided an LE to see it they intend to proceed?? I would really hate it if every retail clothing store contacted me to see if I still wanted the clothes I placed on hold last weekend.

How do the timeframes for Reg B fit into this process? Could we just let them sit there until the credit report expires (90 days) and then consider them withdrawn? Am I missing something here?

Definitions are king. Remember that Regulation B has two definitions: "application" and "completed application." You have to do SOMETHING within 30 days of having a completed application, but you can't just leave an application sitting in the pending stack and wait. Under Regulation B 1002.9(c), within 30 days of an application (Reg. B definition) you have to give notice of your action (approval, denial, denial with counteroffer), or give a notice of incompleteness. If you use the latter, you include a "drop dead" date after which you can consider the application withdrawn unless you get acceptance (notice of intent).

You can start the "incomplete application process" sooner than 30 days from application, but not later. You don't have to follow 1002.9(c) if the applicant is working on completing the application and the application is clearly still active.

Additionally, inaction is not withdrawn. A statement, verbal or written, that the customer wishes to withdraw, is needed.

Otherwise, inaction is:

Closed for incompleteness if a compliant notice of incomplete application was sent, or

Denied for incompleteness.

We state on our cover letter that accompanies the disclosures that if we do not receive their intent to proceed, which in our case is the receipt of their check to pay for the appraisal, by X then no further action will be taken. If the intent is not received we will report on the LAR the file was closed for incompleteness.

Thanks for the response, Dan. That's what I'm going to do!

Dan - Is the no further action date usually 10 days, which corresponds with the LE?

Not Dan, but the length of time can correspond to the complexity of what the customer has to provide. Be realistic.

You have the ability to issue a new LE after ten days (assuming you disclosed the correct date at the top of page 1), but that doesn't have to coincide with the time you allow the applicant to do whatever you consider "conveying intent to proceed."

Mel the last paragraph of the letter reads as follows:

If after reviewing these disclosures you wish to proceed with the loan request please return your check for $375.00 to cover the cost of the appraisal. If we do not receive your check within seven (7) business days (excluding Federal holidays and Sundays) from the date of this letter we will assume you have chosen not to proceed with the loan request and no further action will be taken.

ok so dan says that for loans that the customer doesn't give the intent to proceed, that they will put on the HMDA lar as incomplete.. which i understand, but then can you go further into what actual date you will put on the "action taken" on the Lar? would this be the 30 day deadline? or another date?


So is mostly all banks putting this verbiage on the ITP, or having a cover letter that is sent with the LE docs?

I am being told that Compliance One does not allow any verbiage to be added to the ITP doc.. so then would i have to send a notice of incomplete application?

So I dont know what do to at this point.

Guidance..please
Just asking

Enclose a cover letter.

Re the date - from HMDA:

c. For applications and preapprovals denied, applications and preapprovals approved but not accepted by the applicant, and files closed for incompleteness, enter the date that the action was taken by your institution or the date the notice was sent to the applicant.

Since these are applications per Reg B, we feel they need to be processed accordingly. If a file can only be "closed for incompleteness" when a compliant NOI was issued, how can you close these files even though you have the 10 day verbiage in your disclosure cover letter? Also, does it make sense to send an NOI asking for intent to proceed when it is not needed in order to make a credit decision?

It seems like the only way to process these files is to generate a report of applications that have not returned the intent to proceed and follow up with the borrower. They will either indicate they want to continue and return the intent to proceed, or provide a statement that they want to withdraw. It will then be reported as withdrawn on the HMDA LAR.

Since these are applications per Reg B, we feel they need to be processed accordingly.

The last paragraph of our letter tells the applicant what we need (the check for the appraisal) and by when we need it to proceed with their request and that we will take no action if it's not received. That satisfies the Reg. B notification.


If a file can only be "closed for incompleteness" when a compliant NOI was issued

This in the guidance for reporting the status of the application under Reg. C, you will not find the phrase closed for incompleteness in Reg. B.


It seems like the only way to process these files is to generate a report of applications that have not returned the intent to proceed and follow up with the borrower.

That's a lot of unnecessary work IMO.

I have another question around the same subject.

We are looking at including the NOI with our early disclosures. Informing the customer they have 45 days from the date of the NOI to provide the information.

My concern is that I will not have "Intent to Proceed" at the time the NOI is sent. We are going to add a statement in the cover letter and e-mail (e-disclosures) stating, "You are not required to provide any documents to us (lender) until you have provided us your "Intent to Proceed".

Will this protect us from requiring documents prior to Intent? Or does the state, "You are not required to provide any documents to us (lender) until you have provided us your "Intent to Proceed", required?

Why are you so worked up about requring documents prior to receiving intent? There's no prohibition! The prohibition is that you cannot delay issuing the loan estimate until you receive documents (in order words, you can't condition delivery of the LE on receipt of documentation). You also can't impose a fee before issuing the LE and receiving intent to proceed. Are you confusing those prohibitions?

I think the bigger question is why would you include a NOI with your earlies?
That's only going to confuse the borrower and possibly put them off too.
Send the earlies with the intent to proceed form.
If you don't get it back by the time your costs expire, you can contact the borrower to confirm intent verbally.
When intent is confirmed you can send out the NOI with a restatement of docs required to proceed.
imho, trying to cover all your bases in one envelope can be counterproductive to good business practices and what's best for the borrower.

***Bump***

Reading this thread with interest, particularly around the timing of the NOIA/NOI and when it is issued. My question is how you approach when you send the NOIA/NOI in the first 30 day window?
Is the typical process to have a set number of days and if all the documentation from the borrower necessary to make a credit decision has not been received go ahead and send the NOIA/NOI? Would there be concerns with there not being a set day, the NOIA/NOI being sent at some point within that 30 day window?