Skip to content
BOL Conferences
Thread Options
#2217805 - 07/17/19 01:01 PM Preapproval with no address: HMDA?
Karen B. Offline
100 Club
Joined: Oct 2014
Posts: 151
I want to make sure I understand this section of Regulation C. If we issue a preapproval letter so that the applicant can shop for a new home, but then the application is withdrawn by the applicant without a particular home being selected, would that application be HMDA reportable? I think it would be, but I've seen some training materials that indicate a property must have been selected even though the address hasn't been made known to us. I think we'd report the address as NA.

Here's what Reg C says in Comment 4(a)(9)(i)-3:
3. Property address—not applicable. A financial institution complies with § 1003.4(a)(9)(i) by reporting that the requirement is not applicable if the property address of the property securing the covered loan is not known. For example, if the property did not have a property address at closing or if the applicant did not provide the property address of the property to the financial institution before the application was denied, withdrawn, or closed for incompleteness, the financial institution complies with § 1003.4(a)(9)(i) by reporting that the requirement is not applicable.

Return to Top
HMDA

   
HMDA Academy
#2217807 - 07/17/19 01:28 PM Re: Preapproval with no address: HMDA? Karen B.
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
If you issued a pre-approval letter - how can they withdraw the application? The credit decision was already made.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2217809 - 07/17/19 01:31 PM Re: Preapproval with no address: HMDA? Karen B.
Karen B. Offline
100 Club
Joined: Oct 2014
Posts: 151
Okay, I see that now. We would then report it as approved but not accepted, correct? I just want to make sure that our bankers aren't thinking that a property must be identified in order for the application to be HMDA reportable. Is that correct?

Return to Top
#2217811 - 07/17/19 01:50 PM Re: Preapproval with no address: HMDA? Karen B.
Dan Persfull Online
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
It would be reported as a Code 8.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#2217814 - 07/17/19 02:10 PM Re: Preapproval with no address: HMDA? Karen B.
Karen B. Offline
100 Club
Joined: Oct 2014
Posts: 151
Perfect! Thank you, Randy.

Return to Top
#2217815 - 07/17/19 02:11 PM Re: Preapproval with no address: HMDA? Karen B.
Karen B. Offline
100 Club
Joined: Oct 2014
Posts: 151
And thank you, Dan!

Return to Top
#2217861 - 07/17/19 05:22 PM Re: Preapproval with no address: HMDA? Karen B.
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Karen: I just want to ensure you understand what Dan is saying about Code 8 (preapproval request ANA), not code 2 (ANA).

Code 8 – Preapproval Request Approved But Not Accepted
A financial institution reports that the preapproval request was approved but not accepted if the application was a request for a preapproval under a preapproval program… and the institution made a credit decision approving the preapproval request but the application did not result in a covered loan originated by the financial institution. [Commentary to §1003.4(a)(8)(i) #8]
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top
#2217862 - 07/17/19 05:26 PM Re: Preapproval with no address: HMDA? Karen B.
Karen B. Offline
100 Club
Joined: Oct 2014
Posts: 151
Thank you, Dave. Yes, that was my understanding.

Return to Top
#2217914 - 07/18/19 11:36 AM Re: Preapproval with no address: HMDA? Karen B.
Mountaineers_Fan Offline
100 Club
Joined: Jun 2018
Posts: 100
Just to be clear on this, if the bank hadn't made a credit decision yet and the applicant withdrew the preapproval request it would be considered a withdrawal and would not be HMDA reportable. Correct?

Return to Top
#2217915 - 07/18/19 11:40 AM Re: Preapproval with no address: HMDA? Karen B.
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
Correct.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2217947 - 07/18/19 03:29 PM Re: Preapproval with no address: HMDA? Karen B.
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Agree. Only code 7 & 8 apply to preapprovals. I've listed both below and bolded key wording about a decision being made for both to apply.

Code 7: A financial institution reports that the preapproval request was denied if the application was a request for a preapproval under a preapproval program… and the institution made a credit decision denying the preapproval request. [Commentary to §1003.4(a)(8)(i) #7]

Code 8: A financial institution reports that the preapproval request was approved but not accepted if the application was a request for a preapproval under a preapproval program… and the institution made a credit decision approving the preapproval request but the application did not result in a covered loan originated by the financial institution. [Commentary to §1003.4(a)(8)(i) #8]
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top