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#2165762 - 02/26/18 02:10 PM Counteroffer - Property address/No Prop Address
KTMiteComply Offline
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Good Morning,

We have gotten some new instructions about how we are handling these type loans that I just don't feel is necessarily correct and would like to get some clarification concerning HMDA LAR 2017 and how you would report a situation like this:

Took a "prequal" app - no property address for a purchase. Borrower wanted 100% Financing Program we offer

1. File goes to UW - UW states they don't qualify for 100% Financing and counteroffers to a 3% down program ****KEY NOTE FOR CONSIDERATION - There is NO PROPERTY address****
2. Borrower says yes I'll take that option
3. Borrower 30 days later finds them a house they want to purchase and calls us back giving property address to proceed with working to get the loan closed.
4. Borrower 2 weeks after finding their property calls back and states our rate is too high and they are going with another lender. ***KEY NOTE FOR CONSIDERATION - There IS a Property address***

How do you code this file? Does the fact that there was NO property address when the counteroffer was made as opposed to having a Property address when they withdrew change anything in your consideration?

Thanks,
Karen
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#2165836 - 02/26/18 05:26 PM Re: Counteroffer - Property address/No Prop Address KTMiteComply
David Dickinson Offline
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Central City, NE
I would call this a withdrawal and use the property address identified. That's what you knew at the time of withdrawal.
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#2165844 - 02/26/18 05:34 PM Re: Counteroffer - Property address/No Prop Address KTMiteComply
KTMiteComply Offline
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KTMiteComply
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Hey Thanks David for your input.

I was thinking you had to go back to original request and code as Counteroffer Rejected - Denied, but our Compliance Dept is stating that since the Counteroffer was made at the Prequal stage before a property address was received then that would no longer be valid. So therefore, now that we have a property address we could accept the Withdrawal.

I'm lost on this reasoning though because in my mind what difference does finding a property address make in the fact that you didn't qualify for the 100% Financing and decided to withdraw your file.

IF they had a Property address at the very beginning of the entire scenario we would have reverted back to original terms and Denied the file so I just can't seem to understand why these circumstances are any different?

Appreciate your insight!
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#2165845 - 02/26/18 05:36 PM Re: Counteroffer - Property address/No Prop Address KTMiteComply
David Dickinson Offline
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Central City, NE
This is what I'm hanging my hat on:
If the applicant agrees to proceed with consideration of the financial institution’s counteroffer, the financial institution reports the action taken… based on the terms of the counteroffer. [Commentary to §1003.4(a)(8)(i) #9]

The applicant accepted the counter-offer and then found a house. You no longer have a denial (they accepted the counter-offer) and you no longer have a prequalificaiton (they found a house). They then withdrew.
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#2165849 - 02/26/18 05:46 PM Re: Counteroffer - Property address/No Prop Address KTMiteComply
KTMiteComply Offline
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Hmmmm....maybe I shouldn't have asked this on a Monday since it doesn't take much at all to confuse this OLD mind!!! ;-)

Soooo gheezzzamighty help me cause I may have a problem here Houston!!! I thought I've read the discussion both here and from the HMDA GIR that counteroffers that do not Originated are considered Denied and there was no other code you could consider??? So I guess you are also stating that you are in agreement that since there was no property address when the Counteroffer was made and an address comes into the picture later that changes everything?

Again just to make sure I'm talking apples to apples here...this is for 2017 LAR...

Sorry I'm so hard headed David! :-)
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#2165888 - 02/26/18 07:56 PM Re: Counteroffer - Property address/No Prop Address KTMiteComply
David Dickinson Offline
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Central City, NE
Quote:
I thought I've read the discussion both here and from the HMDA GIR that counteroffers that do not Originated are considered Denied and there was no other code you could consider?

You did read that here. Adam W. pointed out (correctly so) that the August 2017 final rule had some info that changed this. I had missed this previously. That's what I quoted in my last post: If someone accepts the counter-offer, then you basically start over with the counter-offered terms being a "new" application.

Quote:
So I guess you are also stating that you are in agreement that since there was no property address when the Counteroffer was made and an address comes into the picture later that changes everything?

Yes. I don't see this any different than a normal prequal where the applicants find a home. Once the house is identified, it's no longer a prequal. It' a full blow HMDA application.
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#2165904 - 02/26/18 08:31 PM Re: Counteroffer - Property address/No Prop Address David Dickinson
KTMiteComply Offline
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I knew there were changes with this for 2018, but Compliance is making us change this for 2017 LAR and I didn't think this change was in effect until the new HMDA rules went in for 2018?

Sorry to keep bugging you David...I'm scared now that if that was the case before 2018 that I have instructed people for quite some time to do this wrong and I'm not certain I can sleep tonight now...lol! eek sick
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#2165925 - 02/26/18 10:15 PM Re: Counteroffer - Property address/No Prop Address KTMiteComply
David Dickinson Offline
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Central City, NE
Sleep easy. This is not something I was familiar with either & I'll bet most examiners aren't either. It's a clarification (we're thankful for that), but it's not really a change.

Read this thread:https://www.bankersonline.com/forum/ubbthreads.php/topics/2090494/counteroffer-hmda#Post2090494
It shows you how I was in the camp you were in and how the other BOL'ers straightened this out.
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#2165955 - 02/27/18 01:07 PM Re: Counteroffer - Property address/No Prop Address KTMiteComply
Adam Witmer Offline
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Originally Posted By KTMiteComply
I'm scared now that if that was the case before 2018 that I have instructed people for quite some time to do this wrong and I'm not certain I can sleep tonight now...lol! eek sick


I agree with David. The challenge with a clarification like this is that it disrupts the cart for our prior submissions, but does help us going forward. I think the key for your 2017 LAR is to be consistent for 2017. If how you report this in 2017 doesn't align with what you did in 2016 or before, I wouldn't sweat it because the clarification didn't come out until late 2017, so there is no way you would have changed courses prior to this time. This is just a consequence of the change and I would go to battle if an examiner criticized you for changing this in 2017 to align with the new clarification (new rules), even if it didn't align with 2016 and before. Again, the key is being consistent in your 2017 LAR. Either report the way you did before, or how you are going to report going forward - but be consistent in your 2017 LAR. If you aren't consistent in 2017, it will be very difficult to go to battle at all.
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#2165975 - 02/27/18 03:20 PM Re: Counteroffer - Property address/No Prop Address Adam Witmer
KTMiteComply Offline
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Thanks so much you guys for all your help and sorry for being so stubborn!!! I'm thinking of seeking therapy now!!! Like REPROGRAMMING therapy!!! LOL! crazy whistle cool
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