The applicant was sent a Notice of Incomplete Application that indicated the file would be closed on 7.8.20 if we did not receive the requested items. The LO also called the applicant on 7.8.20 for a status update and the applicant stated they wanted to withdraw the application. Do we report the application was withdrawn or it was closed for incompleteness?

Flip a coin - just make sure it lands on the same side for every similar circumstance.

Thanks!

I agree with Randy that you should be fine either way but, as I'm sure you know, I'll add that you will want to have a clear paper trail in the file for your auditors. If your auditors see a notice of incompleteness sent to the applicant, but the filed was coded as withdrawn, your auditors will want to see evidence of the borrower's desire to withdraw.

That "evidence" can be as simple as a dated annotation in the file that the customer was called on [date] and the customer requested that the application be withdrawn.