Does HMDA allow for pre-approval on refi applications?
Procedurally my bank doesn't do preapps on refis. Don't know if that's an internal decision or a regulatory limitation.

I have a scenario where we rec'd a refi request. We have a preapp program, but didn't issue a preapp b/c we don't do preapps for refis.
We had all pieces of info to make an app except an estimated value, but b/c the applicant told us their desire loan amount we can determine the max market value based on our max LTV and the value was looked up on the county appraisal district. I know neither of these replaces an appraisal, but does it constitute enough info to call this an app instead of a preapp?

I am a little at a loss as to how you can have a pre-approval on a refinance. You have a full blown application. You do preapprovals on purchases when they have yet to select a property.

Randy,
In the past, we've taken the approach that a preapp can't be a refi and that we have a complete app anytime we get a refi app.
The argument being made is that we didn't have an estimated value b/c we didn't have an appraisal.

I assume you asked the customer for a estimate and they refuse to provide one? Or are you only asking them 5 questions? Are you issuing a loan estimate? I am trying to figure out how this works.

You don't have to have an appraisal to have an estimated value. All you need is for the applicant to tell you what they believe the home is worth. But as Randy stated - your front lenders have to ask the question.

Let's say they didn't ask the applicant for a value, but we have a property tax statement from the county and we know the value would have to be a max of $x because the applicant provided a desired loan amount and we have a max LTV. Is this an app in this scenario? If not an app, is it a preapp? If not a preapp or App, I'm out of LAR coding options.

Yes. I already know there are perceived holes in the process if this is what happened, but just looking for help to get through this scenario.

OK - let's back up. Are you talking about a true preapproval in which you gather verification documents, run credit, etc. and provide them a conditional commitment letter? Or are we talking of just a prequalification and them providing you basic information and you telling them - sure, if your property appraises for at least $XX and all the other stars align it looks like you might qualify for $XX? And you did not answer one of my questions regarding when are you issuing Loan Estimates on these transactions?

We have a preapproval program - we gather verification docs and issue a conditional commitment letter. We typically don't put refi's through our preapp program. If we have all 6 pieces of info, we issue the Loan Estimate within 3 days.

In this situation, we rec’d a refi request. We collected 5 pieces of info. Didn’t collect an estimated value from the applicant. A commitment letter wasn’t issued. Financials were collected. Credit was pulled. Applicant later said they didn’t want to proceed after 30 days. LE wasn’t issued.

Thank you for asking if this was a prequal. I need to review the reg. I’ve been focused on Preapproval vs app b/c we do have a Preapproval program as mentioned above. Hope I answered everything.

I really think you are playing with fire. How in the world can you possibly do a preapproval on a refinance and not have a clue as to the current estimated value of the collateral property? It sounds like a little bit of game playing to avoid TRID disclosures to me. Might even fall right into a unfair and deceptive practice in the eyes of a regulator. I can tell you, that I have seen a lot of mortgage loan operations and I have never seen one that involves a preapproval program for refinances.

Definitely not attempting to play games. Trying to clean up a mess I walked into and code the loan correctly. Thanks for your time.

Well, I was not accusing you of playing games. But loan officers and mortgage departments left to their own devices can get very creative and that usually ends up creating all sorts of headaches.