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#2274793 - 08/26/22 02:57 PM Consumer Loan Construction to Perm
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Diamond Poster
Joined: Nov 2008
Posts: 1,065
In the mountains
We received an application for a consumer construction to permanent loan. We do not offer this type of credit. We only offer construction only loans to consumers. The lender sent a Adverse Action Notice/Counteroffer and countered a construction only product. The applicant did not accept.

Do we report the original application on our HMDA LAR? I am thinking no since we do not offer that type of credit/product that was requested. Additionally, we would have no terms to report such as loan term and introductory period, etc.
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#2274797 - 08/26/22 03:29 PM Re: Consumer Loan Construction to Perm Likes to Comply
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 80,358
Galveston, TX
I am confused. You mean they applied for a 1x close construction/permanent loan? A construction to permanent loan is usually taking out an existing construction loan and making it into permanent financing.

If you do not offer 1x close construction/permanent loans, then they applied for a product you do not offer and it is not adverse action. In fact, it is not even treated as an application

1002.2(c)(v) A refusal to extend credit because the creditor does not offer the type of credit or credit plan requested.
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#2274800 - 08/26/22 03:44 PM Re: Consumer Loan Construction to Perm Likes to Comply
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Diamond Poster
Joined: Nov 2008
Posts: 1,065
In the mountains
Yes, I mean a 1x close construction/permanent loan. We do not offer that. Thanks for the help!
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