Skittles question is a key fair lending issue regardless of the rest. The bank may require a signature of B on collateral docs, but not the Note. That can't be glossed over and based on the question sounds like a Reg B violation in itself.
1. A biggie and a fair lending violation.
2. If B applied with A this was easy to establish. If A just said B would be on it, that's a reason joint intent rules exist. If not obtained, that would be a problem.
3. It seems co-ownership was the issue, not that they were divorced. But if the bank "withdrew" the app for A because A&B were divorced, then it makes 1 above a little worse.
1. The bank can't withdraw the applicant(s), but it can approve, deny or counteroffer a request.
2. I don't know what the reason for denial was. It wasn't denied, it was wrongly withdrawn and the reason is not stated.
3. I don't believe the bank avoided a problem, it cast a spotlight on it.
4. If the bank had a signature, was B applying for the loan or not?
5. "Ex-spouse" doesn't impact the potential violations.
At issue I see, did the bank require a signature improperly? Did it fail to get joint intent timely? Did the bank believe it erred and create another problem by "withdrawing" the request instead of making a loan decision?
A may have cashflow, but the issue seemed to be collateral. A new application could be made, but it doesn't change the facts of this app. It would cause me to audit withdrawn apps more.
My opinions are not necessarily my employers.
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell