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#2270527 - 05/17/22 03:39 PM Notice to Home Loan Applicant not sent
crcmnot Offline
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Joined: Sep 2016
Posts: 344
Current bank customer that has multiple commercial term & revolving lines of credit with us. One of their commercial lines of credit was recently renewed and with that process new credit reports were pulled along with scores. At the same time as the renewal of their commercial line of credit the customer applied for a consumer real estate purchase loan (TRID). The loan officer did not send the Notice to Home Loan Applicant because they said that they used the same scores/reports that were pulled for the application of the renewal of the commercial line of credit.

Should they have sent the Notice to Home Loan Applicant in this case? Thanks.

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#2270529 - 05/17/22 04:20 PM Re: Notice to Home Loan Applicant not sent crcmnot
Inherent_Risk Offline
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Joined: Jan 2017
Posts: 363
Ignoring the contract issues potentially surrounding the use of a credit report for multiple purposes, it certainly sounds like they used the credit score for a consumer mortgage. The requirement is triggered by the use (not the pull), so yes it should have been sent.

Any person who makes or arranges loans and who uses
a consumer credit score, as defined in subsection (f), in connection
with an application initiated or sought by a consumer for a closed end
loan or the establishment of an open end loan for a consumer purpose
that is secured by 1 to 4 units of residential real property (hereafter in
this subsection referred to as the “lender”) shall provide the following
to the consumer as soon as reasonably practicable

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#2270532 - 05/17/22 04:52 PM Re: Notice to Home Loan Applicant not sent Inherent_Risk
crcmnot Offline
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Joined: Sep 2016
Posts: 344
Thank you - makes sense to me!

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#2272599 - 07/09/22 12:06 AM Re: Notice to Home Loan Applicant not sent crcmnot
Tarhe Online
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Joined: Nov 2006
Posts: 1,244
California
In the scenario above, if it was discovered after the mortgage loan had already funded, should we still send it? We had a similar situation where a spouse was added as a co-borrower midway through processing, we ran her credit report, but neglected to send the Credit Score Disclosure Notice and the Notice to Home Loan Applicant. The loan closed a couple of months ago. Our software is not allowing us to generate her notices at this point. Seems we should still provide them though, right?

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#2272731 - 07/13/22 12:47 PM Re: Notice to Home Loan Applicant not sent crcmnot
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,765
Bloomington, IN
There are no exceptions for not providing this notice. Whether you provide it after the fact will be a management decision. IMHO it should be provided.

The requirement is triggered by the use (not the pull), so yes it should have been sent.

The NHLA is required to be provided only once for each loan request but it does have to be provided for each loan request.

(g) Disclosure of Credit Scores by Certain Mortgage Lenders

(1) In general. Any person who makes or arranges loans and who uses a consumer credit score, as defined in subsection (f), in connection with an application initiated or sought by a consumer for a closed end loan or the establishment of an open end loan for a consumer purpose that is secured by 1 to 4 units of residential real property (hereafter in this subsection referred to as the “lender”) shall provide the following to the consumer as soon as reasonably practicable:


If you use a previously acquired credit score from a another loan request then you still have to provide the notice for the new loan request. The purpose of the notice is to inform the applicant the credit score used and the date the credit score was generated.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#2272770 - 07/13/22 04:56 PM Re: Notice to Home Loan Applicant not sent crcmnot
Tarhe Online
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Joined: Nov 2006
Posts: 1,244
California
Thank you for the detailed explanation - very helpful!

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