I am new to the online application world. We are looking into using a vendor for online mortgage applications and some questions have arose.

1. Econsent - for a a joint application, each borrower must opt to econsent separately, correct? The application requests econsent but in 2 separate sections... This would require separate email addresses?
2. Credit Authorization - for a joint application - how does that work? Can the primary borrower authorize the credit pull for a joint application? It is assumed that the primary borrower is probably completing the application for both borrowers...
3. Applying for credit - again, can a joint application be completed by only one borrower?

I hope this makes some kind of sense... It is confusing to me for sure - that's why I'm asking for assistance in trying to figure out if this is all ok. The vendor says it is - and this is a reputable company but blind faith is not always solid.

Thank you for any/all input!

I'll take a stab at this.

1. Most E-Sign compliant systems that I have seen are limited to one person - one e-mail. It is hard to differentiate between separate individuals using one e-mail account. Consent however involves the "demonstrable consent" handshake and not just completing a box on the on-line application.

2. If have an application for credit, you have a permissible purpose. No credit authorization is required.

3. Not sure how you would ever know, but if one applicant completed the application and put down a co-applicant that was a lie, then they have violated Federal law by providing false information for a loan made by a federal insured institution.

Thank you for being brave! I believe the concern is one borrower providing information and consenting on behalf of both borrowers because this seems to be the "industry standard".

1. This online system/application has the borrower provide all of their information then if there is a coborrower, the coborrower then completes/provides their information. Econsent is offered to each at different times according to their data input. - if econsent is offered individually and they accept individually - are we ok? This piece of software has a pop-up/click to read with the econsent. I'm assuming that would be demonstrable consent? If they can read the pop-up?

2. Again - the credit authorization is listed individually for both borrower and coborrower. This is not necessarily an application - rather an "inquiry" - what are the rules around this?

3. Violating federal law - so we're covered if someone commits fraud during the process? Say borrower does complete all information for borrower and coborrower - but coborrower did not consent (to econsent, joint credit pull, etc...) we would be covered?

I'll ask about 2 first: are you not getting the six pieces of information that make an app? Because if you are not, then 1 is moot since you have nothing to disclose that would require consent.

3: How is this any different that a paper application dropped off in the same ink and printing, or a telephone app where Carol gives all the information for her and Bob? You're not closing the loan yet, just taking an app (or not).

Thank you #Just Jay.

1. I'm still waiting on an answer for that but I do not believe we are getting all six pieces. Every time I ask I get radio silence.

3. Very true as well...

I have screenshots of the app and I'm not sure what I should be looking for in addition to the consent issues that I was asked to consider. I can't find any online resources about what should be considered when collecting data online for a potential mortgage loan application.

Some banks leave out income in the online submission. Then an MLO contacts the applicant to obtain it. Once this happens the six piece of information is collected and the clock starts ticking for the initial disclosures.

What is the name of the solution? Is it Consumer Connect?

The software/app is called SimpleNexus. And, from the responses above, I guess I’m over-complicating this situation.

That software and app are VERY customizable - just work with the setup manager to get everything up to where you are comfortable with it. If you aren't collecting all six pieces it is because someone on the setup team has made the decision to not ask for it.

It'd be a good idea to look into the econsent a bit and make sure it matches up with what your existing processes are. If you sell loans to the secondary market, they have specific econsent rules or approved providers. Also consider if you will be delivering disclosures through the software/app or not.

Thank you Island Dreaming! By chance, do you use SimpleNexus?

I have been advised that we are not collecting the 6 pieces of information and we re-request econsent from Encompass after the information has been imported.

The point I'm stuck on now is the authorization to pull credit for the coborrower as part of the online inquiry. Any additional thoughts? It's not an application, can anyone substantiate the validity of the online consent? I'm assuming the Loan officer wants to pull credit as soon as they receive the inquiry and not wait for a verbal consent.

I am confused. Why do you feel this is an inquiry? An application for credit may not rise to the level of an application under TRID and trigger TRID disclosures, but that does not make it an inquiry.

I understand what you're saying - that's the term I have been advised to use. I have been told that we are not considering these applications.

Then you are going to have a real hard time complying with Regulation B.

How have you defined an application in your procedures for Reg B purposes?

Reg B:
(f) Application means an oral or written request for an extension of credit that is made in accordance with procedures used by a creditor for the type of credit requested. The term application does not include the use of an account or line of credit to obtain an amount of credit that is within a previously established credit limit. A completed application means an application in connection with which a creditor has received all the information that the creditor regularly obtains and considers in evaluating applications for the amount and type of credit requested (including, but not limited to, credit reports, any additional information requested from the applicant, and any approvals or reports by governmental agencies or other persons that are necessary to guarantee, insure, or provide security for the credit or collateral). The creditor shall exercise reasonable diligence in obtaining such information.

I have a hard time with providing an on-line application platform and the having your procedures say it is not an application. If it is just an inquiry, it should clearly indicate that and then information requested should be really limited. Like name and e-mail and "I want to know if I apply for $xx amount, what can I expect?" If they are collecting 5 pieces of information and then are going to run credit reports - good luck with that attempt.