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#2238381 - 06/19/20 05:58 PM Is a loan application required?
RockChucker, CAMS Offline
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Joined: Jul 2013
Posts: 1,657
The Country
Happy Juneteenth everyone. I am sure this has come up before but I was unable to find it. Is a customer required to complete an application for a loan? I am not usually involved in the lending side of things but the individual who does is not available. The scenario is as follows: Customer originally applies with spouse for a mortgage loan which is approved and closed. He then requests a car loan in just his name. A lender believes they can use the information provided for the mortgage and approve him for a car loan.

Thoughts? In particular, if it is required can you please share the citation. The only thing I have found is in section 202.5e but don't feel confident either way.
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#2238383 - 06/19/20 06:18 PM Re: Is a loan application required? RockChucker, CAMS
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,633
Galveston, TX
If you mean 1002.4(c) - then that is it - all other applications can be oral.
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#2238387 - 06/19/20 06:40 PM Re: Is a loan application required? RockChucker, CAMS
RockChucker, CAMS Offline
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Joined: Jul 2013
Posts: 1,657
The Country
Thanks Randy, I always appreciate the quick responses.
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#2238390 - 06/19/20 06:50 PM Re: Is a loan application required? RockChucker, CAMS
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,633
Galveston, TX
Of course that is not saying it is a good idea unless you have a really good application tracking system and the time and date of every oral application is logged in some manner. And, of course, if you take one oral application, then that sets the precedent for accepting oral applications and you would not be able to require anyone else to then submit an application in writing.
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#2238400 - 06/19/20 08:17 PM Re: Is a loan application required? RockChucker, CAMS
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
Posts: 10,068
Toano, VA
"Fair" lending = "Consistent" lending
A lack of policy/procedure or deviation from established policy/procedure sets the stage for fair lending and UDAAP problems. Maybe Rocky or someone else who's been put through the fair lending wringer can add to the arguments for absolute consistency.
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#2238402 - 06/19/20 08:27 PM Re: Is a loan application required? RockChucker, CAMS
swiggles Offline
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swiggles
Joined: Aug 2001
Posts: 7,333
Our loan policy requires a written loan application for every consumer loan. That doesn't mean that the application has to be completed and signed by the applicant. It can be conveyed orally and reduced to writing by the loan officer.....keeping in mind that there is a Reg B disclosure that must be stated orally by the lender prior to the applicant disclosing certain types of income. Depending upon your consumer loan application form, there may be other disclosures that need to be covered....such as joint intent. Joint intent has to be signified every time someone applies I know you said this is an individual, however). But those reasons are why most banks use written consumer loan application forms.....just my opinion. Was the officer going to use the same credit report? There's another can of worms..
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