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#2218259 - 07/23/19 11:37 PM Reg B Notice Timing on Incomplete Application
Larry Offline
Member
Joined: Feb 2016
Posts: 91
If the lender receives an application that is incomplete and they don't send a notice of incompleteness, what happens on day 30 if they still haven't received everything that the applicant can complete?

-- Can the lender keep the application open and try to get the other items from the applicant while they're waiting on the items needed from third parties to make the application complete?

-- Or is the lender required to issue a notice of approval, denial, or counteroffer within those first 30 days since they didn't send the applicant a notice of incompleteness?

Thanks,

Larry

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Lending Compliance
#2218263 - 07/24/19 12:42 PM Re: Reg B Notice Timing on Incomplete Application Larry
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
. . what happens on day 30 if they still haven't received everything that the applicant can complete . . . since they didn't send the applicant a notice of incompleteness?

You either:

1. Send the notice of incompleteness, or
2. Deny the loan request for an incomplete application.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#2218582 - 07/26/19 08:35 PM Re: Reg B Notice Timing on Incomplete Application Dan Persfull
Larry Offline
Member
Joined: Feb 2016
Posts: 91
Thanks Dan. That's how I generally viewed the requirement, but I started questioning myself based on the specific language in Section 1002.9(c) because it says that if the application is incomplete regarding items the applicant can complete then within 30 days of receiving it we must either provide a notice of incompleteness or notify the applicant of our action "in accordance with paragraph (a) of this section". But the part of paragraph (a) that covers incomplete applications says we must provide the notice of denial within 30 days after taking adverse action on it, not within 30 days of receiving it.

So does this really mean that we need to provide the denial within the timing requirements of 9(c) but according to the content requirements of 9(a)?

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#2218585 - 07/26/19 08:48 PM Re: Reg B Notice Timing on Incomplete Application Larry
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
2. Deny the loan request for an incomplete application.

You can verbally deny the loan request and then you must provide the written notice within 30 days of the date you provided the verbal notification.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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