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#2122576 - 03/18/17 07:41 PM
Re: Denying 1 of Multiple Applicants - AAN?
Compliance NABW
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Power Poster
Joined: Jun 2003
Posts: 7,650
Florida
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I'll agree with the others Randy, Dan, Dave, etc. - former FDIC, lending compliance since 1986, Fair Lending by a baptism of fire 2 years later, etc. You can add to an application, but when you take someone off, it is a different request for credit, because as stated above, someone is preventing the loan from approval.
If your boss wants another opinion, there are many good COMPLIANCE attorneys that will provide one. BOL is trying to help cut down on $500/hr attorney fees. (For gosh sakes, don't refer her to a RE closing attorney an ambulance chaser - not when the fines and penalties can run into 6-7 figures.)
Exams from a fair lending standpoint - if they are looking at comparable files and select your one in question (and notice it), it could trigger a larger search. Sometimes, they regulators the creditor document the exceptions, with regulator oversight, each file found being an ECOA violation. Oh, they will go back to the last exam they tested, so it may be a while. Also, the 25 month clock will come to a stop - telling the creditor not to destroy any files.
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Integrity. With it, nothing else matters. Without it, nothing else matters.
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#2143426 - 08/24/17 02:05 PM
Re: Denying 1 of Multiple Applicants - AAN?
Compliance NABW
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Diamond Poster
Joined: Oct 2015
Posts: 1,668
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Follow up on this topic, though outside of this Regulation (please forgive), what do you do with the denied applicant from a HMDA standpoint? Do you report the joint application as denied and then move forward with the counter offer under a new loan application, which you would later report as Originated if applicable? Or, do you just treat it as 1 loan number and report it as originated and leave the specific denied applicant off of the HMDA-LAR?
Last edited by Justin C.; 08/24/17 04:34 PM.
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#2145499 - 09/11/17 02:36 PM
Re: Denying 1 of Multiple Applicants - AAN?
David Dickinson
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Diamond Poster
Joined: Oct 2015
Posts: 1,668
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Thank you David. So, in Scenario 2, you would send the AAN, but you wouldn't actually report that piece for HMDA purposes, correct?
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#2148356 - 10/02/17 09:07 PM
Re: Denying 1 of Multiple Applicants - AAN?
Compliance NABW
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Platinum Poster
Joined: Nov 2010
Posts: 919
USA
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Otherwise 12 CFR 1002.2(c) states that adverse action means: "A refusal to grant credit in substantially the amount or on substantially the terms requested in an application unless the creditor makes a counteroffer (to grant credit in a different amount or on other terms) and the applicant uses or expressly accepts the credit offered." The terms and conditions requested were for joint credit. Offering anything other than joint credit is not offering credit on substantially the same terms and conditions and it is not offering credit to the "deleted" applicant at all.
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Opinions are strictly my own, and have nothing to do with my employer.
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#2148578 - 10/04/17 02:46 PM
Re: Denying 1 of Multiple Applicants - AAN?
Compliance NABW
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10K Club
Joined: Nov 2000
Posts: 18,762
Central City, NE
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The terms and conditions requested were for joint credit. Offering anything other than joint credit is not offering credit on substantially the same terms and conditions and it is not offering credit to the "deleted" applicant at all. That may be your opinion, but I disagree. Please show me a regulatory advisory/comment that backs this up. Read my post from 9/9/17. I agree with you if you denied the application (an option) and told the "approved" person to start over. I disagree if you offered a counter-offer and they accept.
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#2149142 - 10/09/17 01:33 PM
Re: Denying 1 of Multiple Applicants - AAN?
Compliance NABW
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10K Club
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
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The terms and conditions requested were for joint credit. Offering anything other than joint credit is not offering credit on substantially the same terms and conditions and it is not offering credit to the "deleted" applicant at all.
I'm not sure what InFairness' intent was with this statement but I agree with David. If a counteroffer is made and accepted, regardless of the counteroffer's terms, then adverse action was not taken against the applicant or applicants that accepted the counteroffer.
1002.2(c) states the refusal to grant (not offer) credit is adverse action UNLESS a counteroffer is made and the applicant accepts the counteroffer.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#2149376 - 10/11/17 01:30 PM
Re: Denying 1 of Multiple Applicants - AAN?
Compliance NABW
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Platinum Poster
Joined: Nov 2010
Posts: 919
USA
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The denied applicant does not have a credit offer to accept. That person did not receive credit, and so needs an AAN. I have seen multiple institutions cited by both the FRB and the CFPB for this.
_________________________
Opinions are strictly my own, and have nothing to do with my employer.
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#2149718 - 10/13/17 04:34 PM
Re: Denying 1 of Multiple Applicants - AAN?
Compliance NABW
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Diamond Poster
Joined: Oct 2015
Posts: 1,668
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InFairness - The thread seemed to already agree that you issue an AAN to the denied party from the joint applicants. I think we're talking over each other here. Unless, you are saying that both applicants should get a denial and starting the application over with a single applicant is the only way to go.
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