We have a loan that is will not qualify secondary market and bringing in house due to low appraisal value. In my opinion, its cleaner to deny the secondary market loan and start new. The original app is dated 6/27. Can we use that app for the in house loan and if so, what would be the app date for our in house LE? Would a memo to file explaining what happened suffice? Or would it be better to have a Change in Circumstance and go that route?

Thank you.

You're counter-offering to keep this in-house.
no need to start a new application or file.
A file should read like a book. So the application dated 6/27 is page 1. switching to in-house is just a new chapter in the book.

So then would just the change in circumstance work or do we need to issue a counter offer to the customer?

You can't make the loan on the terms originally requested, so you have to make a counteroffer.

Agreed - counter-offer letter. Applicant acceptance of counter-offer triggers CC.