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#2260651 - 10/04/21 04:27 PM counteroffer or withdrawal
ADN Offline
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Joined: Mar 2007
Posts: 205
We had a customer apply to refinance their mortgage loan. The 10 day credit report pull prior to closing showed a new collection causing an increased interest rate. Applicants did not want to proceed because the increased rate did not make sense for them at that point. We are discussing whether this is a withdrawal or countoffer with lender. Please advise as to which camp you feel this scenario this fits. All comments are greatly appreciated!

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Lending Compliance
#2260653 - 10/04/21 04:33 PM Re: counteroffer or withdrawal ADN
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,926
Galveston, TX
It is a denial.

You also need to consider a SAR for potential mortgage fraud, if they did not disclose this to you in their application and if they should have know about it.
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#2260677 - 10/05/21 11:30 AM Re: counteroffer or withdrawal ADN
Adam Witmer Offline
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Joined: Sep 2010
Posts: 2,643
As Randy said, this is a denial that requires a Notice of Action Taken (NAT) as you have refused to grant credit on substantially the same terms they applied for. If they had expressly accepted or used your counter offer of a higher rate, it would be no harm no foul (no NAT needed). However, when they don't expressly accept or use a counter offer, your application defaults to what they applied for, meaning you are denying them.
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Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

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