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#2172011 - 04/05/18 12:44 PM HMDA Withdrawn - REGB Denied
KTMiteComply Offline
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Hey good morning,

I think all my years of training in a small town community bank is clashing with big city training and I'm missing a link in my comprehension. The way our process was in a small bank there was really never a way that you Denied a file for REGB purposes but reported it Withdrawn on the HMDA LAR. So I wanted to give you this scenario and maybe you can explain if this is the case here and give me any additional guidance to understand.

I had stated the file needed to be Denied for BOTH REGB and REGC purposes.

Loan DTI is 78% and Policy states we must be 43%. Our procedures is it must go to UW to make a credit decision. The UW did review the Income portion of the file as a courtesy for the LO but did not fully UW the file. There are numerous tax returns/retirements/paystubs all in the file to be reviewed before this 1/13 stmt below.

Per the LO here is his comment in the file that "triggered" my perception that this file should be Denied:
1/13 - "Emailed Client and advised DTI is high and requesting Income Verification and LIabilities"

I went in and read the copy of the email and it reads like this: "The UW is coming up with "X" amount of Income without this property you are claiming for additional Income. What that means is your DTI is at 80%...are you coming up with that Income and Liabilities for us to review?"


1/16 - Borrower emails and states: As we review the LE we are reading we will need X amount to close and we do not have X amount to close. Please Withdraw this loan.

So is this just a Withdrawal all the way around the block for REGB & REGC since it never formally went to UW for a full UW review?

Is this a Denial for REGB purposes since it appears a Negative Credit Decision was communicated about DTI requirements?

Is this a Denial for REGB and a Withdrawal for REGC?

Thanks for any input and training you guys can give me to learn,
Karen
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#2172019 - 04/05/18 01:09 PM Re: HMDA Withdrawn - REGB Denied KTMiteComply
Dan Persfull Offline
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Bloomington, IN
The LO asked for documentation for additional income. Applicant withdrew application based on the LE disclosing they needed $X to close and they did not have the funds to close.

Withdrawal - Reg. B & Reg. C.
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#2172022 - 04/05/18 01:21 PM Re: HMDA Withdrawn - REGB Denied KTMiteComply
KTMiteComply Offline
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Hey thanks Dan...so the fact that he stated he advised them that their DTI was high and requested additional Income info does not come into play at all and if so why not? I thought if a Negative Credit Decision was communicated that resulted in a Denial?
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#2172035 - 04/05/18 01:57 PM Re: HMDA Withdrawn - REGB Denied KTMiteComply
Tracey, CRCM Offline
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Gorham, ME
From what you posted, the LO didn't say the loan was denied. He/She asked for additional income needed to make a credit decision.

Withdrawal-
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#2172049 - 04/05/18 02:41 PM Re: HMDA Withdrawn - REGB Denied Tracey, CRCM
KTMiteComply Offline
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So how do you reconcile this stmt the LO made? So you guys view this as us not telling them their DTI was too high for this loan but more or less it's high and we need more stuff to verify this is true and correct? There were numerous docs in file and the UW did an Income calculation for the LO to convey this to the Borrower even though it wasn't fully UW? Again, I'm not being argumentative, I'm just trying to see clearly how this is not a Negative Stmt? I know I"m missing in a link in my comprehension...sorry...it's so frustrating on my part...just sayin! frown

1/13 - "Emailed Client and advised DTI is high and requesting Income Verification and Liabilities"
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#2172084 - 04/05/18 03:59 PM Re: HMDA Withdrawn - REGB Denied KTMiteComply
Tracey, CRCM Offline
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Gorham, ME
I take that statement to mean the LO did not have a credit report all the liability requirement to determine the DTI correctly, therefore does not have enough information to make a credit decision.
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#2172088 - 04/05/18 04:10 PM Re: HMDA Withdrawn - REGB Denied KTMiteComply
KTMiteComply Offline
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Hey thanks for discussing this with me Tracy. So I'll clarify a little more ...I try to put as little as possible on here b/c alot of times I tend to get to lengthy in my description ;-)

Yes credit was pulled first thing, so the LO and UW had all the credit information and they had enough documentation in the file to calculate Income. It had something to do with a certain piece of property that it appears they were counting as Income and the UW didn't feel there was sufficient documentation to use that Income.

The MBO made that stmt, without that "property" , their income was basically cut in half so they needed more info to allow the UW to use this as Income, otherwise their DTI was above our policy to lend. That's how I perceived the stmt:
"The UW is coming up with "X" amount of Income without this property you are claiming for additional Income. What that means is your DTI is at 80%...are you coming up with that Income and Liabilities for us to review?"

In the other comment the LO says they "advised the Borrower their DTI is too high"....this right here is exactly what just red flags me as "Denied"
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#2172090 - 04/05/18 04:14 PM Re: HMDA Withdrawn - REGB Denied KTMiteComply
Tracey, CRCM Offline
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Gorham, ME
But you said: "Emailed Client and advised DTI is high and requesting Income Verification and Liabilities"

Which makes me think that a final credit decision had not been made. Additional information was needed.
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#2172092 - 04/05/18 04:16 PM Re: HMDA Withdrawn - REGB Denied KTMiteComply
KTMiteComply Offline
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OK...thanks so much for your help and discussion! I appreciate it so very much!

Have a great day,
Karen
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#2172240 - 04/06/18 01:32 PM Re: HMDA Withdrawn - REGB Denied KTMiteComply
Dan Persfull Offline
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Bloomington, IN
I'm just trying to see clearly how this is not a Negative Stmt?. . . . . . ."X" amount of Income without this property you are claiming for additional Income

The loan officer, based on the information posted and without the benefit of being able to review the physical file, simply told the applicant they have a high DTI. From what was posted I do not see where the loan officer made a statement they would not make the loan based on the DTI as stated.

Apparently there was an income producing property that was not included in the DTI calculation and the LO was informing the applicant they needed additional information on that property to properly evaluate the request.

Again my observation is based on the information posted.
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#2172245 - 04/06/18 01:55 PM Re: HMDA Withdrawn - REGB Denied KTMiteComply
KTMiteComply Offline
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AS ALWAYS...thanks again Dan for your perspective...you know how much I always value your opinion!

Have a great weekend,
Karen
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