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#2242885 - 09/22/20 02:12 PM Secondary Market and Denials
Anonymous
Unregistered

Good morning!

Our bank sells mortgage loans on the secondary market. Our investors will not purchase TRID loans where the timing rules have been violated (eg. Early disclosures sent more than 3 business-days after a TRID application is received). We regularly have LOs that miss the required TRID dates. Yes, it's a training issue, but that's another story for another time. We've been denying these applications as not meeting the investor standards. Is this the best that we can do with these applications?

Thanks!

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#2242888 - 09/22/20 02:19 PM Re: Secondary Market and Denials Anonymous
raitchjay Offline
Power Poster
Joined: Oct 2009
Posts: 8,668
OK
You deny a loan because you didn't get your LE out on time? How can you possibly defend that?
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#2242889 - 09/22/20 02:21 PM Re: Secondary Market and Denials Anonymous
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,597
Galveston, TX
Yeah - I would be very interested in the denial reason they put on that adverse action notice smile
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2242895 - 09/22/20 03:33 PM Re: Secondary Market and Denials Anonymous
Anonymous
Unregistered

Another anon here - if that was here, my next step would be to look at that set of denials - the ones specifically for timing issues - and break it out by the government monitoring information reported on your HMDA LAR (race, ethnicity, sex).

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#2242916 - 09/22/20 06:26 PM Re: Secondary Market and Denials Anonymous
InFairness, CRCM Offline
Platinum Poster
InFairness, CRCM
Joined: Nov 2010
Posts: 616
USA
That denial reason is not defensible. How can you deny an applicant's request for credit because the lender's LO made an error?
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#2242948 - 09/23/20 01:38 AM Re: Secondary Market and Denials Anonymous
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,353
Florida
If ANY of those applications are selected for regulatory review, the bank will be forced to do a look back with substantial fines and penalties. A bank timing mistake is not a reason for denial!
Concur with last anon to look at all the files denied for GMI, and get legal involved if any are minorities.
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#2243262 - 09/29/20 04:08 PM Re: Secondary Market and Denials Anonymous
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,630
Bloomington, IN
We've been denying these applications as not meeting the investor standards

Please explain how the applicant did not meet the investor's standards?
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2243295 - 09/29/20 08:12 PM Re: Secondary Market and Denials Anonymous
Wonderofitall Offline
100 Club
Wonderofitall
Joined: Sep 2010
Posts: 171
Out West
All,

Just read Randy's answer in this past weekend's Weekly Banker Briefing/Latest Compliance Topics, re: LE Not Provided by 3rd Business Day. If an investor won't purchase the loan due this error and the bank's policy doesn't allow it to book a loan with secondary market terms, how can it continue on with the file?

Thanks!
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#2243299 - 09/29/20 08:42 PM Re: Secondary Market and Denials Anonymous
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,597
Galveston, TX
Well, you either do mortgage loans or you do not. The fact that you screw up loan disclosures and it makes the loan not salable in the secondary market is not a denial reason.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2243300 - 09/29/20 08:49 PM Re: Secondary Market and Denials Anonymous
Skittles Online
10K Club
Skittles
Joined: Sep 2002
Posts: 13,963
TN
Here and at my previous employer - this would become a portfolio loan.
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#2243308 - 09/29/20 10:18 PM Re: Secondary Market and Denials Anonymous
#Just Jay Offline
10K Club
#Just Jay
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
I find it amazing that in the five years TRID has been with us that this has not been sniffed out by your auditors, examiners, or even your investors researching your pull through!
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