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#2186767 - 07/25/18 04:42 PM Action Taken: ANA OR CLOSED FOR INCOMPLETENESS
ynot Offline
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Florida
We have an approved application that has dragged on due to it is a short sale. The selling FI has not approved or disapproved the contract. Would this be ANA or Closed for incompleteness? Thank you for your help.

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#2186769 - 07/25/18 04:59 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
Carolina Blue Offline
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Lost in a regulatory fog
If you have cleared all underwriting conditions then you can report as approved not accepted. You can only report Closed for Incompleteness if you have sent a letter to the applicant explaining what is still needed to make a credit decision with a deadline to provide it and they did not meet the deadline.

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#2186784 - 07/25/18 06:14 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
Truffle Royale Offline

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Why exactly are you wanting to close this file out?

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#2186786 - 07/25/18 06:29 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS Carolina Blue
ynot Offline
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Sorry, Closed for incompleteness was not what I meant, we would Deny for credit application incomplete.

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#2186810 - 07/25/18 07:25 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS Truffle Royale
ynot Offline
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We are thinking that, for Reg B purposes, the application could be treated as a withdrawal of an approved application because we did not hear back from the customer after we told them they were approved and only needed an approval from the seller's lending institution on the short sale. We don't know what happened but do know we did not hear form the applicant. So for HMDA, we're trying to figure out if this is an ANA or a Denial, Withdrawal doesn't work because we've decisioned the application and the customer did not expressly withdraw.

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#2186906 - 07/26/18 01:34 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
ynot Offline
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bump

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#2186909 - 07/26/18 01:54 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
Skittles Offline
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A withdrawal is only applicable if the applicant expressly withdraws prior to the loan being approved or denied. It appears you had made the decision to approve so a withdrawal is not applicable.
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#2186910 - 07/26/18 01:58 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS Skittles
ynot Offline
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Florida
Yes, as I stated, withdrawal doesn't work because we've decisioned the application and the customer did not expressly withdraw. We are seeking guidance for HMDA purposes, is this an ANA or Denied??

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#2186932 - 07/26/18 03:07 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
RR Becca Offline
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out of the frying pan...
Did you put an expiration date on the approval? I'm not sure you can/should just arbitrarily close the file without some sort of contact with the customer. I know we've had some drag on for a while but eventually originated. The customers would have been furious if they'd come back with a contract and been told their file was closed.
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#2186962 - 07/26/18 04:55 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
Truffle Royale Offline

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^^^ditto.
Contact the customer again and verify if they're still waiting or not.

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#2186998 - 07/26/18 06:09 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
ynot Offline
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Florida
We are handling the Reg B side of the application under 1002.9(e)

1002.9(e) Withdrawal of approved application. When an applicant submits an application and the parties contemplate that the applicant will inquire about its status, if the creditor approves the application and the applicant has not inquired within 30 days after applying, the creditor may treat the application as withdrawn and need not comply with paragraph (a)(1) of this section.

This application has dragged on since December 2017 and we haven’t heard from the applicant in several months.. We do not provide written commitments so there is nothing in writing with an expiration date.

So, we’re now stuck trying to figure out the HMDA reporting status since it can’t be a withdrawal under Reg C (even though it can under Reg B). ANA or denial?

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#2187009 - 07/26/18 06:42 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
RR Becca Offline
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out of the frying pan...
We've got one from October of 2017 that has just gone to closing this week. I would still suggest at least attempting to contact the customer.
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#2187010 - 07/26/18 06:44 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
Truffle Royale Offline

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Especially because this is a short sale, I would contact the borrower again to make sure they want to close the file.
They may be as frustrated as you are at waiting all this time but it's out of their hands.

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#2187067 - 07/27/18 01:12 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
complyorelse Offline
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Interesting scenario, ynot. We had a similar situation but the customer ended up withdrawing the request. For HMDA, we reported this as ANA since the application had been approved.

Not sure how to handle the HMDA side if you can't get in touch with the applicant. Doesn't seem you should have to keep it open indefinitely though if they don't call you back.

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#2187071 - 07/27/18 01:21 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
rlcarey Offline
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I have never worked in a bank that told a borrower that they were approved for a mortgage loan and they were not also told that this approval will expire on XX date. Why would you communicate an open-end approval? You are falling on your own swords.
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#2187076 - 07/27/18 01:42 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
RR Joker Offline
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Have you ever worked for a small community bank, Randy? We love falling on swords. Daily. smirk
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#2187079 - 07/27/18 01:47 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
Adam Witmer Offline
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While I agree with others that leaving the approval open-ended is problematic, I believe that ynot is (probably) in compliance with Regulation B, based on the section quoted from 1002.9(e). For HMDA, however, they seem stuck between a rock and a hard place.

The loan did not originate so you can't report it that way.

The bank did not send a notice of completness (in accordance with Reg B), so that can't be used.

The applicant did not "expressly" withdraw, so withdrawn does not appear appropriate.

They did not deny this, so I wouldn't report it that way as there is not an AA notice.

Finally, we look at ANA. To report this as ANA, the approval can only be subject to customary commitment or closing conditions. As the purchase agreement isn't back yet, they wouldn't have an appraisal which is not a customary commitment or closing condition, but rather, an underwriting or credit worthiness condition, which ultimately seems to take ANA out of the mix as well.

I think we might have found a HMDA "black hole." Anyone care to disagree or see anything I missed?
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#2187082 - 07/27/18 01:58 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
RR Joker Offline
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I'm with several of the others in that you may be rushing to close your file out. I've had them sit for months while title issues were worked out.

Have you attempted to contact the customer or are you just going off of the fact they haven't contacted you?

Have you attempted to contract the selling FI to see if things just didn't work out? Have you checked court records to see if maybe it went on into foreclosure?

I think you should really attempt to get to the bottom of the heap before you leap to a conclusion.

If it turns out you have no contract and won't get one, then it will/could likely be denied for incompleteness.

Adam, this statement:

"As the purchase agreement isn't back yet, they wouldn't have an appraisal which is not a customary commitment or closing condition"

I don't believe this is a known fact. I know we often have an internal eval before I ever see the early disclosure requests. wink
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#2187083 - 07/27/18 01:59 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
rlcarey Offline
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Adam, I am not sure that they do not have an appraisal. It is just a matter of the current lender telling them whether or not or what offer they are going to accept for the short sale, but maybe ynot can shed more light on that subject.
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#2187087 - 07/27/18 02:09 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
Adam Witmer Offline
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True, true. That info wasn't provided, but let's assume the appraisal isn't back/not ordered. Would this be a "black hole?"

That is what I am curious about now... wink
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Adam Witmer, CRCM

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#2187088 - 07/27/18 02:11 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS RR Joker
Adam Witmer Offline
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Originally Posted By RR Joker
Adam, this statement:

"As the purchase agreement isn't back yet, they wouldn't have an appraisal which is not a customary commitment or closing condition"

I don't believe this is a known fact. I know we often have an internal eval before I ever see the early disclosure requests. wink


Sorry. I should have said "they may not have an appraisal... wink
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Adam Witmer, CRCM

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#2187091 - 07/27/18 02:21 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
RR Joker Offline
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My contention is this. The OP states, unconditionally, that they approved the loan. That's there right to do so. They mention no conditions.

Customer has gone A-Wall.

IF the bank approved the loan without a contract [not really sure how that wouldn't be a condition if they knew there would be one] then I don't see an issue with ANA.

IF the bank did condition on a sales contract in keeping with the actual request, then Denied for Incompleteness would sound reasonable.

I don't believe this is a black hole...I think we are just missing crucial pieces of the puzzle.
Last edited by RR Joker; 07/27/18 02:22 PM. Reason: typo
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#2187096 - 07/27/18 02:38 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
Adam Witmer Offline
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Okay, I agree with the ANA if there are not underwriting conditions, though I don't think we know that for sure yet.

However, I could see a black hole occurring (probably not in this specific case) but in a very close situation: if a financial institution had given a conditional approval, hadn't ordered an appraisal, hadn't heard from the customer, and just used 1002.9(e) to comply with Regulation B and didn't deny the file for incompleteness (I have seen banks say they don't want to offend an applicant so they don't want to send a denial letter). In that case, it would appear that none of the HMDA reasons would fit.

I know, I know... I am now taking this to a hypothetical situation, but ynot's situation is very close to this and I felt like that might have been part of their thinking.

Originally Posted By RR Joker

IF the bank did condition on a sales contract in keeping with the actual request, then Denied for Incompleteness would sound reasonable.

But what if they didn't send a denial notice? I'm not saying they still can't do it, but what if they didn't and just relied on 1002.9(e)? That is where I see a potential black hole coming into play.
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Adam Witmer, CRCM

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#2187100 - 07/27/18 02:59 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
RR Joker Offline
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Well, a Notice of Incomplete isn't technically a 'denial notice'...it's just a way to drop-dead a file because a piece of crucial info has not been received. It's also not in any way something [not the model I use] that is offensive or implies 'denied'. Just...we are going to close your file if you don't cough up so-n-so.

I'm not sure how well it would work if they gave a carte blanch approval though. That would be kinda be contradictive.

I still don't think you have a black hole. And in weird situations, there are always answers and conclusions you can come to on the one-off's like this 'could' be...and no examiner is going to take issue with it...at least not in my experience.
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#2188332 - 08/07/18 08:54 PM Re: Action Taken: ANA OR CLOSED FOR INCOMPLETENESS ynot
ynot Offline
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I apologize for the delay, I was out of the office. To answer a few questions regarding the situation. Yes, we have an executed contract between the seller and borrower, however, because it is a short sale we were waiting on the FI approval. No, we do not have an appraisal, we didn't get that far. The lender has tried several times to contact the customer and they will not return the calls for the past few months. We checked our property appraisers website and the borrowers have purchased another property with another lender. So back to my original question as far as HMDA, how do we report it??

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