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#2263984 - 12/23/21 02:15 PM Preapproval or application?
palmertown Offline
Member
Joined: Nov 2004
Posts: 65
Pennsylvania
Our bank has a documented preapproval program. Recently we have had applications that were submitted as preapprovals; however, before we could review and provide the borrower the preapproval letter the borrower identified a property.

Should these be coded as preapprovals or not?

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#2263985 - 12/23/21 02:19 PM Re: Preapproval or application? palmertown
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,310
Galveston, TX
Unless a decision was made prior to the property being added, this would no longer be a preapproval request.
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#2263986 - 12/23/21 02:22 PM Re: Preapproval or application? palmertown
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,765
Bloomington, IN
Page 23 - 2021 GIR

A preapproval request is an application under Regulation C if the request is:
1. For a home purchase loan;
2. Not secured by a multifamily dwelling;
3. Not for an open-end line of credit or for a reverse mortgage; and
4. Reviewed under a preapproval program (see definition of preapproval program
immediately below). 12 CFR 1003.2(b)(2).
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2266096 - 02/09/22 09:19 PM Re: Preapproval or application? palmertown
JoAnne S Offline
New Poster
Joined: Aug 2020
Posts: 8
We are having confusion on this subject and looking for clarification. We have an application with property TBD that was preapproved with the following conditions:
- no changes in financial or employment status
- fully executed purchase agreement
- satisfactory appraisal
- title committment
- flood zone certificate
- hazard insurance
Also preapproval application had 4 applicants.

Property was identified and purchase agreement provided 1/20/22. Application was subsequently withdrawn because 1st two applicants no longer needed parents to help them to qualify for the loan. New application with just the original 2 applicants was started.

Our question is how do we treat the application with the 4 applicants for HMDA. Is it an approved not accepted? Preapproval withdrawn and thus not reportable? Or do we really have 2 applications - and we treat the application with the TBD address as preapproval withdrawn (not reportable) and then the application with the property address and the 4 applicants as approved not accepted?

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#2266098 - 02/09/22 09:52 PM Re: Preapproval or application? palmertown
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,765
Bloomington, IN
Since the property was identified before the 4 applicant application was withdrawn then IMO you have a withdrawn application.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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