Our loan origination software allows underwriters to select up to 4 reasons for denial. ONE reason that can be selected is:

"Garnishment, attachment, foreclosure, repossession, collection action or judgment"

Is this compliant? (In my opinion, it seems too vague and should be split up into several individual reasons).

Looks like they lumped together three of the reasons from the Reg B Model form.

__Collection action or judgment

__Garnishment or attachment

__Foreclosure or repossession

That's what I thought. I wonder if combining these 3 reasons is in compliance with the Reg.

Regulation B really doesn't get into any detail as to what is specific other than mentioning that bank policy isn't specific and providing model forms. Forms vendors sometimes do seem to slightly stray from the model form, and presumably, at the discretion of their attorneys. Most, like the combined reason you provide, seem fairly consistent with the model form and I personally wouldn't worry about it too much. In fact, I have often seen the three reasons Randy quoted combined into one reason and have never heard an examiner criticize it.

While you should question your LOS/form vendor if the options don't make sense, I typically see most issues resulting from the use of the "other" box, where lenders can write in their own reason for denial.