We have an application for a rate/term refi. During the interview with the applicants we discovered that the loan the borrowers want the refi on is a loan we hold. We suggested that we can do a modification instead of the rate/term refi to save them money. The applicants took that option. The question is: Do we have an application for HMDA that is withdrawn or would this just be a change is product?

Sounds like an accepted counteroffer to me.

Never thought of this in that way but, we never denied it just offered a better solution for the applicant. Anyone else have an opinion?

There was a counteroffer made to modify the loan instead of refinancing it and the applicant accepted the counteroffer. In other words they changed their request, they did not withdraw it.

You do not, IMO, have a reportable transaction.