Sorry if this seems simple, but if at the closing table the customer decided to payoff a loan instead of following through with the renewal, would this be considered a withdrawn app?

Approved but not accepted!

The bank approved the loan - it never closed.

Would that require an adverse action notice or anything?

no. You're not acting adversely on the application. You approved the loan. The borrower is opting not to accept your approval.

Not from a regulatory perspective. We send a "withdrawn notice" produced by our doc prep software, same as an adverse action notice. It's just good documentary evidence of what happened and when.

Swiggles, I advise clients against any paperwork not required by regulations. Fully documented yes. Banks can unwillingly be creating exceptions where none legally exist, and if it looks or seems like an Aan, it could confuse both applicants and employees.

I agree, Rocky P....however, not my call. I would like it a lot better if the withdrawn notice was simply created and placed in the file as a method of closing out the file....but NOT mailed to the applicant. I DO like the idea of lenders being forced to go into the software and perform a task to close out every file....either send a denial or prepare a withdrawn notice for the file (which establishes the date of withdrawal....important for HMDA).

Preparing the withdrawn notice also triggers a second review to make sure that the withdrawal is not a denial in disguise.