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#2182449 - 06/20/18 03:32 PM Loan Terms on Denial
beegee Offline
Diamond Poster
Joined: Feb 2004
Posts: 1,096
South
If we deny a loan or if its withdrawn is the loan term field on the LAR NA?

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#2182452 - 06/20/18 03:45 PM Re: Loan Terms on Denial beegee
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,631
For a denied or withdrawn application that had a definite term, you list the term that would have applied. The only time you list NA for the loan term is if an application does not have a definite term, such as a reverse mortgage.

From Regulation C:
"(25) The scheduled number of months after which the legal obligation will mature or terminate or would have matured or terminated."

From the CFPB reporting reference chart:
"Enter “NA” for covered loan or application without a definite term, such as a reverse mortgage, Comment 4(a)(25)-5."

From the Commentary to Regulation C:
5. Loan or application without a definite term. For a covered loan or application without a definite term, such as a reverse mortgage, a financial institution complies with § 1003.4(a)(25) by reporting that the requirement is not applicable.
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Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
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#2182454 - 06/20/18 03:50 PM Re: Loan Terms on Denial Adam Witmer
beegee Offline
Diamond Poster
Joined: Feb 2004
Posts: 1,096
South
Thanks Adam!

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#2185388 - 07/13/18 08:33 PM Re: Loan Terms on Denial beegee
Cloud9 Offline
100 Club
Joined: Jul 2008
Posts: 205
What if this is a commercial loan, no specific loan term is applied for, and we don't have specific terms to apply for?

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#2185413 - 07/16/18 12:29 PM Re: Loan Terms on Denial beegee
RR Joker Offline
10K Club
RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
How do you deny a loan inwhich you have no idea what was actually requested?
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#2185523 - 07/16/18 06:17 PM Re: Loan Terms on Denial beegee
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Either 1) you don't have an application because no specific terms were discussed or 2) the loan officer has more information (maybe even just assumptions) and you don't have that information documented.
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#2203012 - 01/15/19 04:31 PM Re: Loan Terms on Denial beegee
Banker K, CRCM Offline
Gold Star
Joined: Jan 2010
Posts: 293
Oklahoma
I respectfully disagree that you can't have an application without a loan term. The most common example of this are the TRID 6 pieces of an application...loan term is not one of them. (I do agree that by the time you issue the LE, you would have told the customer the terms we have available, which would you like? and then show that term on the LE).

But sometimes, even on non-TRID loans (including comm'l loans) you do indeed get an application & make your decision without knowing the loan term b/c you have enough information to deny the file, so a loan term was not decided/known. I feel "NA" would be appropriate there.

Any more thoughts on this, or how others are doing these?
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All comments are mine & should not be taken as legal advice.

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#2203017 - 01/15/19 04:49 PM Re: Loan Terms on Denial beegee
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Banker K: You're assuming an application under TRID is the same as an application under HMDA. They have different definitions. You can certainly have an application under TRID and not Reg B/C and vice versa.

You're right that TRID says you have an application when you have the 6 pieces of info, but HMDA doesn't say that. HMDA says an application is a request for credit "made in accordance with procedures used by a financial institution for the type of credit requested." [§1003.2(b)(1)] Reg B has very similar wording. The bank could require the loan term to be in their procedures. I don't know what the bank's procedures are. That's why I said "either" you don't have an application OR the LO has more info that the OP doesn't know about. It could also be that the bank's procedures don't require this - but then you have the problem they are facing: How do you complete HMDA data without knowing the term.
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David Dickinson
http://www.bankerscompliance.com

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