Thoughts about what the denial reason should be on the LAR (and the ECOA denial notice) when a refinance is denied because the applicant is not on the title as an owner of the property. Thank you.

Assuming the collateral owner was not willing to grant it.... maybe insufficient collateral?

Is the applicant on the loan that is being paid off? If not, you don't have a HMDA reportable transaction.

No. The applicant is not on the loan being paid off, so I do have a HMDA reportable transaction, as a purchase, not as a refinance.

The applicant is a party to the LLC that owns the property. He failed to disclose this information during the application stage. At title search, we realized the applicant is not the owner of the property and denied the loan. The loan is HMDA reportable, as it is essentially an application for purchase of dwelling secured property from an LLC by an individual. Did we deny due to collateral or due to "other?" Thoughts? Thanks again.

If it's truly a purchase, with the intent to transfer title at the time of closing, I would question why it was denied.

With how the scenario is presented I'm with hmdagal. If he's applying to purchase the property that is owned by the LLC how can he be on title before he purchases the property?

Depends on what kind of loan the consumer actually applied for. If he applied for a refinance and he does not own the property it would be a denial, likely for insufficient collateral. If he applied for a purchase and has (or will be providing a purchase contract) then the fact that he is does not own the property would not be a reason for denial.