Hello- we sometimes do a denial/counteroffer together- we can do that notice within 3 days of application at times by reviewing the credit report- my question is on the counteroffer we say we can do an adjustable rate mortgage but later in underwriting the person doesn't qualify for that. I understand we can deny them on the counteroffer. I have been told that we have to honor that counteroffer and give that loan to the person based on what we counteroffered them.

Which is right and how do we offer proof that we do not have to honor the counteroffer- (when we do the denial/counteroffer we haven't started how underwriting process etc )

Thank you.

This is a pet peeve of mine.

If you counteroffer the applicant you are telling them we can't make the loan on the terms requested but we will make you a loan on these terms. If you have not underwritten the applicant to see if they qualify for those terms before you offer them then IMO that's on you.

If you still need to underwrite the applicant to qualify them for different terms then I would suggest denying the loan for the reason you cannot make it as applied for and advising them you would reconsider the request if certain conditions are met.

My 2 cents worth.

Dan- I appreciate your answer. Thanks