We have joint borrowers who applied for a mortgage. Based on information provided the loan was approved. Upon verification of employment it was determined that the job the wife thought she was getting did not happen so subsequently the loan was declined based on DTI issues. The husband qualifies on his own.

The question is; do we need a new application or would the original be a decline with a counter to remove the wife?

The requirement for applications are internal or investor driven. You owe the wife an adverse action notice. Other than that, how you proceed is up to you.

Another question, if we have him do a new application, we still owe him an adverse action on the original application correct?

You owe HER an AAN.

If I chose to require a new application, I would also provide HIM with an AAN, because the loan request was declined. If I used the original application, I would provide one only to her. I don't like doing it that way......would rather decline the application and start new. That's just cleaner for me in a bunch of ways.

Totally a bank decision. As a condition of the counter offer to him, one of the conditions might be a clean application with just him on it. Six or one have a dozen of the other.