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#2179802 - 05/25/18 02:00 PM Counteroffer accepted immediately--sending notice
Karen B. Offline
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We do a lot of indirect auto loans, and they have a very quick turnaround time. Occasionally we'll notify the dealer that we can't do a loan under the terms requested, but we can under other terms--in short, we make a counteroffer. Oftentimes the customer will accept the counteroffer immediately, the deal will close, and the customer will drive off in the new car--all on the same day. Do we still have to mail the counteroffer letter? Reg B says the adverse action notice has to be in writing, as described below, but we're concerned about creating confusion for the customer. Thank you.

Regulation B1002.9
(2) Content of notification when adverse action is taken. A notification given to an applicant when adverse action is taken shall be in writing and shall contain a statement of the action taken; the name and address of the creditor; a statement of the provisions of section 701(a) of the Act; the name and address of the Federal agency that administers compliance with respect to the creditor; and either:
(i) A statement of specific reasons for the action taken; or
(ii) A disclosure of the applicant's right to a statement of specific reasons within 30 days, if the statement is requested within 60 days of the creditor's notification. The disclosure shall include the name, address, and telephone number of the person or office from which the statement of reasons can be obtained. If the creditor chooses to provide the reasons orally, the creditor shall also disclose the applicant's right to have them confirmed in writing within 30 days of receiving the applicant's written request for confirmation.

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Fair Lending
#2179811 - 05/25/18 02:33 PM Re: Counteroffer accepted immediately--sending notice Karen B.
rlcarey Online
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rlcarey
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Galveston, TX
There is no requirement that a counter-offer be made in writing. If they took the counteroffer, there is no adverse action.
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#2179812 - 05/25/18 02:36 PM Re: Counteroffer accepted immediately--sending notice Karen B.
Karen B. Offline
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Yay! Thank you, Randy!

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#2218059 - 07/19/19 05:05 PM Re: Counteroffer accepted immediately--sending notice Karen B.
scb2011 Offline
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If the counter offer is not accepted, is an AAN or counteroffer that includes AAN on the initial request is required?

Is an open end home equity line of credit request that cannot be originated due to too high LTV where the bank is able to offer a lower loan amount considered a counteroffer?

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#2218068 - 07/19/19 05:46 PM Re: Counteroffer accepted immediately--sending notice Karen B.
David Dickinson Offline
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David Dickinson
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Central City, NE
If a counter-offer is not accepted, you are back to a denial (for whatever reason you couldn't do their initial request and made the counter-offer). You have 90 days (max) to send an AAN. However, in the future, I recommend sending a combined counter-offer and AAN (a "one & done"). That way you don't have to remember to send an ANN later, if they don't accept your counter-offer.

Here's the regulatory citations to support what I'm saying:
A creditor must notify an applicant of action taken (denial) within 90 days after notifying the applicant of a counteroffer if the applicant does not expressly accept or use the credit offered. [§1002.9(a)(1)(iv)]

The commentary to this section states you “does not require a creditor to hold a counteroffer open for 90 days or any other particular length of time.”


A creditor that gives the applicant a combined counteroffer and adverse action notice . . . need not send a second adverse action notice if the applicant does not accept the counteroffer. [Commentary to §1002.9(a)(1) #6]
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#2218069 - 07/19/19 05:48 PM Re: Counteroffer accepted immediately--sending notice Karen B.
David Dickinson Offline
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David Dickinson
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Central City, NE
Quote:
Is an open end home equity line of credit request that cannot be originated due to too high LTV where the bank is able to offer a lower loan amount considered a counteroffer?

Yes. Send them a combined counteroffer and AAN saying why you can't make the original request (LTV is too high) and offer a lower low amount. Give them a deadline to respond by. If you don't hear from them by that time, you're done. No need to send a second notice.
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#2224358 - 10/24/19 07:07 PM Re: Counteroffer accepted immediately--sending notice Karen B.
PCBDebbie, CRCM Offline
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Is it possible to send a counteroffer that is subject to conditions? So based on stated information we cannot grant XX loan amount but can offer XX, but the loan amount still requires validation of income.

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#2224688 - 10/29/19 05:58 PM Re: Counteroffer accepted immediately--sending notice Karen B.
David Dickinson Offline
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David Dickinson
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Central City, NE
Sure. Just because you give a counteroffer doesn't mean you are committed to making the loan. You still have the right to verify everything. If things don't check out, you can still deny the application.

For instance, someone asks for $100k. You know from their DTI ratio that you can only lend them $90K. You tell them "I can't do 100, but I could do 90." They say "ok" and you move forward. Then, during normal underwriting and verification procedures, you discover their income isn't what they said. You could counteroffer again or deny them.
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#2224739 - 10/29/19 11:44 PM Re: Counteroffer accepted immediately--sending notice David Dickinson
Vicki S Offline
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Is an adverse action notice with a counter-offer required to have a date the counter-offer must be accepted by?

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#2224748 - 10/30/19 12:06 PM Re: Counteroffer accepted immediately--sending notice Karen B.
rlcarey Online
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Galveston, TX
No, not by regulation, but why would you not want to close that window at some point?
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#2224751 - 10/30/19 12:26 PM Re: Counteroffer accepted immediately--sending notice Karen B.
Rocky P Online
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Vicki, welcome to BOL. Like Mr.Carey mentioned, there is no federal reg. However, you have HMDA to consider (how ling are you going to keep it pending before a final action, and also expiration of the credit documents.
Many banks impose a 15 day limit or "no further consideration will be given to your application."
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