We have joint applicants, one is a stud with stellar credit and credit score and the other is a dud with terrible credit and credit score. For AAN purposes, if we provide the specific reasons for turndown to the dud, such as repossession, delinquent past/present credit obligations with others, etc. and then provide an AAN to the stud, with a turndown reason being unqualified co-applicant, is this considered specific enough?? Or is it better to state repossession, delinquent credit obligations, etc on the stud's AAN as well - even though these reasons don't specifically apply to the stud himself, but are the primary reasons for the turndown?

Or is it better to state repossession, delinquent credit obligations, etc on the stud's AAN as well - even though these reasons don't specifically apply to the stud himself, but are the primary reasons for the turndown?

This. ^^^^^

Ok, thanks Dan. I'm guessing that ties back to this portion of Reg. B: 1002.9(b)(2) Statement of specific reasons. The statement of reasons for adverse action required by paragraph (a)(2)(i) of this section must be specific and indicate the principal reason(s) for the adverse action. Statements that the adverse action was based on the creditor's internal standards or policies or that the applicant, joint applicant, or similar party failed to achieve a qualifying score on the creditor's credit scoring system are insufficient.


And we look at combined DTI of the joint applicants (although individual DTI is also listed) in our application/underwriting portal. So in order to use the excessive obligation in regard to income or income insufficient for amount of credit requested reasons the combined current or proposed DTI of the two applicants should be over our maximum DTI ratio, correct? If one of the two applicant's individual DTI is over our maximum DTI, these denial reasons shouldn't be used (since our practice is to use combined DTI). Would that be correct?

Your denial reasons will be directly tied to your underwriting requirements - so if you do not use an individual DTI - then no.