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.
Reg B:
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.
Your thoughts:
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 It wasn't denied, it was wrongly withdrawn and the reason is not stated.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 It would cause me to audit withdrawn apps more.
_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell