Thread Options
#2203475 - 01/18/19 07:59 PM Denial or Closed for Incompleteness
Likes to Comply Offline
Diamond Poster
Joined: Nov 2008
Posts: 1,055
In the mountains
We have a application with two applicants. Pulled credit and the one of the applicants had bad credit. So the a combined decline/counteroffer was sent with the offer of the one application with good credit applying for the loan on their own. The applicant accepted this offer. Later in the process, a Notice of Incomplete Application was sent because we still needed tax returns to make a credit decision. The applicant did not respond within the time given and the file was ultimately closed for incompleteness.

Do we report a decline based on the original application (with info on the two applicants) because even though the good credit applicant agreed to the counteroffer, they did not fulfill the requests for information in order for us to make a credit decision?

Or

Since they accepted the counteroffer to move forward as an application with a single applicant and subsequently the file was closed for incompleteness, do we report it as closed for incompleteness with info for the one applicant?

Thanks in advance.
_________________________
Always learning something new...

Return to Top
HMDA

   
HMDA Academy
#2203478 - 01/18/19 08:03 PM Re: Denial or Closed for Incompleteness Likes to Comply
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
If a counteroffer is accepted, you report all data subject to what the counter-offer represented. In this case, incomplete and one applicant. Here's some regulatory references to support this:


If an applicant accepts a counteroffer for an amount different from the amount for which the applicant applied, the financial institution reports the covered loan amount granted. [Commentary to §1003.4(a)(7) #1]

If an applicant does not accept a counteroffer or fails to respond, the institution reports the amount initially requested. [Commentary to §1003.4(a)(7) #1]


If a financial institution makes a counteroffer to lend on terms different from the applicant’s initial request (for example, for a shorter loan maturity, with a different interest rate, or in a different amount) and the applicant declines to proceed with the counteroffer or fails to respond, the institution reports the action taken as a denial on the original terms requested by the applicant.

If the applicant agrees to proceed with consideration of the financial institution’s counteroffer, the financial institution reports the action taken… based on the terms of the counteroffer. [Commentary to §1003.4(a)(8)(i) #9]
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top
#2203479 - 01/18/19 08:09 PM Re: Denial or Closed for Incompleteness Likes to Comply
Likes to Comply Offline
Diamond Poster
Joined: Nov 2008
Posts: 1,055
In the mountains
We have another scenario...

Appraisal came back low, so the application was a decline/counter offer for a lower loan amount. Applicants accepted the lower loan amount and proceed forward. After a re-evaluation of the property and appraisal, the appraisal amount was lowered again, so we did another decline/ counter offer for an even lower loan amount. The applicants accepted and moved forward. However, we never received a sales contract. The LO sent a Notice of Incomplete Application requesting the sales contract multiple times over a few months extending the response date. The odd scenario is because the applicants were attempting to purchase a home from a family member and so things were not done in the typical order of having an actual contract to proceed. In any case, the applicants never provided a sales contract and we do not want to keep extending the time to do so, its been almost 6 months. The file was ultimately closed.

So do we report a decline based on the original application or do we report closed for incompleteness?
_________________________
Always learning something new...

Return to Top
#2203481 - 01/18/19 08:11 PM Re: Denial or Closed for Incompleteness Likes to Comply
Likes to Comply Offline
Diamond Poster
Joined: Nov 2008
Posts: 1,055
In the mountains
So ultimately it will be reported as closed for incompleteness with the terms of the final counteroffer that was accepted?
_________________________
Always learning something new...

Return to Top
#2203482 - 01/18/19 08:15 PM Re: Denial or Closed for Incompleteness Likes to Comply
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
So ultimately it will be reported as closed for incompleteness with the terms of the final counteroffer that was accepted?

Yes
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top