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#2135563 - 06/23/17 03:04 PM Intent to proceed
Tracey, CRCM Offline
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Gorham, ME
Customer applies for loan on June 9th. LE is issued. Customer has not provided intent to proceed as of today. What are our options? I know we can issue a new LE as the initial one expired. But:

1- Decision as incomplete?
2- Send incomplete letter for intent to proceed?
3- Wait until day 30 and deny as incomplete?

What are others doing in these situations?
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#2135567 - 06/23/17 03:14 PM Re: Intent to proceed Tracey, CRCM
Truffle Royale Offline

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Contact (call) customer to see if they wish to proceed or withdraw. Would suggest you do this on Day 8 or so because intent just has to be documented so a verbal to the LO would be sufficient.
Compose a good cover letter to send out with all of your LEs that outlines steps to take to proceed and indicates that if you do not hear from the customer by x date, you will close their file for incompleteness.

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#2135587 - 06/23/17 04:19 PM Re: Intent to proceed Tracey, CRCM
Tracey, CRCM Offline
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Gorham, ME
We have called customer and he has indicated that he will not give intent until an issue with the property is resolved (why the LO took the application I don't know). My thought is that we close the file as incomplete now, and once the property issue is resolved, he reapplies.
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#2135590 - 06/23/17 04:38 PM Re: Intent to proceed Tracey, CRCM
rlcarey Online
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rlcarey
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he has indicated that he will not give intent until

Sounds like a withdrawal to me
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#2135608 - 06/23/17 05:39 PM Re: Intent to proceed Tracey, CRCM
Tracey, CRCM Offline
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Gorham, ME
I thought of that Randy also- but not sure I can get away with noting the file as such, as he has said he wants his application to stay active? But won't give intent...
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#2135615 - 06/23/17 05:48 PM Re: Intent to proceed Tracey, CRCM
Truffle Royale Offline

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You have to decision the loan within 30 days of application (Reg B) or keep following up with drop dead dates to show it didn't just languish.
The app was taken on June 9th so you're just at two weeks today. You can note the information and send him a letter with a drop dead date in it. Because he communicated with you about why he isn't moving forward, you can move the 30 days out from that date. That way the burden of communication goes back to him. If he doesn't come back to you by the drop dead date, you close the file for incompleteness.
He's actually hurting himself by not giving intent because now, when/if he does, you can redo the LE. Otherwise you would have been locked into your LE costs even if it took him months to get to closing.

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#2135619 - 06/23/17 05:49 PM Re: Intent to proceed Tracey, CRCM
raitchjay Offline
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OK
Yes, but if "issue with property" never gets resolved, he would be out appraisal and title fees, etc.
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#2135623 - 06/23/17 05:53 PM Re: Intent to proceed Tracey, CRCM
Tracey, CRCM Offline
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Gorham, ME
I think that is the issue Raitchjay- he doesn't want us ordering appraisal/title, etc.

Again, Loan officer should not have even taken the application!
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#2135625 - 06/23/17 05:56 PM Re: Intent to proceed Tracey, CRCM
RR Joker Offline
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The Swamp
What makes you think the LO would have known there was an issue? If a customer wants to apply, that's pretty much their call, not ours.
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#2135627 - 06/23/17 05:56 PM Re: Intent to proceed Tracey, CRCM
Truffle Royale Offline

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I don't agree.
Why wouldn't the LO/bank work with him to get the issue resolved before moving forward with appraisal and title?
You don't HAVE to jump on ordering these items right away if you're aware of an issue with the property that will need to be resolved before you can do the loan.
Why did LO take app? Likely because the borrower needed the confirmation that he was loan worthy to push the seller to resolve.
Could it have been done as a prequalification? sure but it wasn't.
So you just deal with what you've got in front of you.

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#2135629 - 06/23/17 06:00 PM Re: Intent to proceed Tracey, CRCM
raitchjay Offline
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OK
The LO might well do that. Why would a re-issued LE after expiration automatically mean higher costs to the applicant? It wouldn't mean that at my bank.
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#2135631 - 06/23/17 06:14 PM Re: Intent to proceed Tracey, CRCM
RR Joker Offline
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The Swamp
IMHO, it's a simple matter of documenting the file and continuing contact with the customer. The bank is not being lax by not completing underwriting...the applicant has ASKED for it to be placed on hold for some period of time while he works an issue out they may or may not be workable. I don't find that all that unusual nor particularly problematic. If you are real concerned, sum his request up in a letter and send it to him so you have even better documentation in your file that you aren't just dragging your feet.

I just closed out a loan this week, different circumstances in that it was actually an approved loan, but the borrower didn't want to close until 3 months later. We just put it on hold. Now it's closed.
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#2135644 - 06/23/17 06:33 PM Re: Intent to proceed Tracey, CRCM
Truffle Royale Offline

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Not saying costs would go up on a redisclosed LE, raitchjay. Just saying that the costs on the original LE are not longer locked in because borrower did not give intent before putting loan on hold.

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#2135763 - 06/26/17 01:11 PM Re: Intent to proceed Tracey, CRCM
Tracey, CRCM Offline
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Posts: 542
Gorham, ME
Thanks all. The LO did know there was an issue with the property (the borrower provided that information at the time of application).

I can certainly send out an incomplete letter- but at this point, do I include all the documentation needed (paystubs, assets, etc) and intent to proceed as the reason for the incompleteness? Or just intent?
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#2135766 - 06/26/17 01:21 PM Re: Intent to proceed Tracey, CRCM
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
The purpose of a NOI is to inform the applicant of the information needed to complete the application. Will intent only complete the application?
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#2135778 - 06/26/17 01:54 PM Re: Intent to proceed Tracey, CRCM
Tracey, CRCM Offline
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Gorham, ME
No but I can't request documents for underwriting if I don't have intent, correct?
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#2135783 - 06/26/17 02:09 PM Re: Intent to proceed Tracey, CRCM
rlcarey Online
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Galveston, TX
You can't request verification documents before you issue the LE. After you issue the LE you are free to request anything you need.
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#2170106 - 03/26/18 05:47 PM Re: Intent to proceed Tracey, CRCM
Tarhe Offline
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Joined: Nov 2006
Posts: 1,281
California
We issued our LE on a construction-only loan 2 days ago. Today, the applicant called the LO to verbally request a substantial increase in the loan amount. As we don't accept verbal applications, we asked for him to complete the first page of the application - which we should get today (thus beginning our 3-day clock). Can we ask for a revised budget as well as the application - before we start our 3-day period within which we must issue the revised LE? (We suspect the applicant hasn't worked the increase into his budget but is just asking for more money "just in case".)

Also, the LO is asking if we can request tax returns BEFORE we get "Intent to Proceed"? I'm thinking that the only limitation is collecting fees before "Intent to Proceed" but as our LE has gone out, we can ask for supporting information before Intent. Right?

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#2170107 - 03/26/18 05:49 PM Re: Intent to proceed Tracey, CRCM
rlcarey Online
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rlcarey
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Galveston, TX
Can we ask for a revised budget as well as the application - before we start our 3-day period within which we must issue the revised LE?

No, you cannot condition the issuance of an LE on anything other than the 6 elements.

Once you issue the LE you can request supporting documentation.
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#2170108 - 03/26/18 05:55 PM Re: Intent to proceed Tracey, CRCM
Tarhe Offline
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Posts: 1,281
California
Thank you!!

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#2170114 - 03/26/18 06:13 PM Re: Intent to proceed Tracey, CRCM
John Burnett Offline
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John Burnett
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Cape Cod
You've already issued the LE on the original request; you are not constrained from requesting additional documentation, but you can't hold up the three-day deadline for providing the LE once you have the 6 elements of an application.

Now that you are aware of a change in the borrower's request, you know that some of the costs in the LE are likely to change, and you have three business days from learning of that fact to get a revised LE out to the applicant (or you won't be able to increase the estimate basis for costs increasing due to the increased loan amount.
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