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#2196854 - 10/30/18 08:08 PM Report This Denial
George Offline
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Joined: Apr 2016
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Have a weird situation: our bank had a Mortgage company that would deal with secondary market; whereas the bank would originate in-house loans. Our mortgage company closed, and one of our portfolio lenders was handed an application that was in the middle of the application process. The application was ultimately denied by the investor due to appraisal issues.

Is this ours to report?

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#2196856 - 10/30/18 08:11 PM Re: Report This Denial George
Adam Witmer Offline
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Posts: 2,622
What do you mean "denied by the investor?"

If they did the underwriting, then they are responsible for reporting the denial. If you were using their software/AUS (though that does NOT seem to be the case), then you would be responsible to report it.

Also, did your portfolio lender underwrite it to see if it would be approved for an in-house product?
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#2196858 - 10/30/18 08:17 PM Re: Report This Denial George
George Offline
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Joined: Apr 2016
Posts: 364
As far as I know, no, we weren't using their AUS; all I have to go on right now is that the "reason for the denial is the appraisal was not accepted by the investor."

And again, as far as I know, no, our portfolio lender did not see if they could be approved in-house.

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#2196904 - 10/31/18 12:05 PM Re: Report This Denial George
Adam Witmer Offline
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Posts: 2,622
Okay. You will need to know who did the underwriting and made the decision to deny the loan. It sounds like this is probably the investor, but I really don't have enough information to know for sure. The way the rule is written, if a creditor mad a credit decision to deny the application, it is required to report the application on its LAR.

The commentary explains this:
"ii. In the case of an application for a covered loan that did not result in an origination, a financial institution reports the action it took on that application if it made a credit decision on the application or was reviewing the application when the application was withdrawn or closed for incompleteness. It is not relevant whether the financial institution received the application from the applicant or from another institution, such as a broker, or whether another financial institution also reviewed and reported an action taken on the same application."
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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.
www.compliancecohort.com

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#2196924 - 10/31/18 02:22 PM Re: Report This Denial George
RVFlyboy Offline
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RVFlyboy
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Soaring over Georgia
Deleted - incorrect info posted but couldn't delete the actual post.
Last edited by BeechFlyboy; 10/31/18 08:03 PM.
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