I wanted to get some input on a dilemma that I am trying to help production with. Due to some issues with inexperienced LOs, the processors often get files that do not receive a "pass" from Freddie Mac's LP for a variety of reasons. However, per TRID (6 pieces of information), these files are applications requiring issuance of initial disclosures. We are looking for some efficiencies and hoping to eliminate the need to issue the disclosures for such loans. They want to be able to deny such loans before the 3 day period expires, thus canceling the need for disclosures. In credit score related circumstances this is relatively clear cut, but in other instances I am worried we will be issuing denials without a valid/verified reason, or without giving the borrower enough time to provide any missing material. One item noted is a situation where LP says caution or no pass due to high DTI based on verbal information, i.e. borrower says "I make $50,000 per year." This results in a 50% DTI. Can we deny based on this verbal information, or do we need documentation? If we need documentation, can we deny for incomplete if the borrower can not provide w-2s or whatever within the initial 3-day time frame? What if borrower doesn't have 2 years of residence history, etc.? Any thoughts/ideas would be appreciated.

Also, I posted something in the Advertising forum but didn't receive a response. This forum seems a little more active, so - for anybody that is a mortgage banker, which logo do you use, Equal Housing or Equal Opportunity? I am wondering if only institutions with ties to the FDIC are supposed to use Equal Housing Lender?

You can deny the loan based upon the information received within the 3 days. Even though you will not be required to send the early disclosures you still have to send the ECOA Valuations disclosure. Regulation B does not provide the 3 day exemption.

Likely you will need to set criteria for when it is ok to use LP to do these quick denials and when you're just going to have to send the earlies because, as you said, there is no clear cut reason for the quick denial. It would be easy if one size fit all but that just isn't feasible when there are so many variables to consider.