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#2137149 - 07/06/17 07:20 PM Ecoa expressly withdrawn-appraisal issues
Chocaholic Offline
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Joined: Aug 2005
Posts: 443
Northwest
I seem to remember that if you had a situation where the loan could/would not be approved at the original terms... you could not permit an expressly withdrawn application but must in fact deny the request. Although when I review ECOA I am not finding any support and what it states for expressly withdrawn doesn't make sense to me given this fact pattern. .Help is appreciated..

Fact pattern is - client wanted loan for $300,000 to purchase property and loan was approved subject to an appraised value of $400,000 or more. Appraisal came in at under the sale price... $350,000... so loan would not be made for $300,000 but only $265,000. Applicants are backing out of transaction and want to withdraw their application..

So, allow the expressly withdrawn or do we decline the loan ( counter-offer would not be accepted and anyway it would result in a denial if not accepted)..

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#2137154 - 07/06/17 07:30 PM Re: Ecoa expressly withdrawn-appraisal issues Chocaholic
Adam F Online
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Adam F
Joined: Apr 2013
Posts: 411
VA
We would treat this as a denial based on 1002.2(c)(1)(i).

1002.2—Definitions.

(c) Adverse action. (1) The term means:

(i) 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;

(ii) A termination of an account or an unfavorable change in the terms of an account that does not affect all or substantially all of a class of the creditor's accounts; or

(iii) A refusal to increase the amount of credit available to an applicant who has made an application for an increase.
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It is better to act cautiously beforehand than to suffer afterward.

The answers I give are my opinions. Not legal advice.

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#2137155 - 07/06/17 07:33 PM Re: Ecoa expressly withdrawn-appraisal issues Chocaholic
Chocaholic Offline
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Joined: Aug 2005
Posts: 443
Northwest
Thank you, didn't think I was dreaming...

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#2137161 - 07/06/17 07:57 PM Re: Ecoa expressly withdrawn-appraisal issues Chocaholic
Adam F Online
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Adam F
Joined: Apr 2013
Posts: 411
VA
Glad to help. The strange thing is I had this exact scenario come across my desk this morning. The only difference was the dollar amounts.
_________________________
It is better to act cautiously beforehand than to suffer afterward.

The answers I give are my opinions. Not legal advice.

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#2137169 - 07/06/17 08:45 PM Re: Ecoa expressly withdrawn-appraisal issues Chocaholic
Dan Persfull Online
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Dan Persfull
Joined: Aug 2002
Posts: 46,957
Bloomington, IN
counter-offer would not be accepted

See 1002.9(a)(1)(iv) for notification requirements for a non accepted counteroffer if not combined with an AAN.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#2137179 - 07/06/17 09:27 PM Re: Ecoa expressly withdrawn-appraisal issues Dan Persfull
Chocaholic Offline
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Joined: Aug 2005
Posts: 443
Northwest
Thank you, we usually do a counter-offer on the AAN so we don't have to track and follow-up.

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