We had a HMDA-reportable application where in order to originate the loan, the ex-spouse would need to sign documents and authorize the transaction (Texas). Because the applicant didn't feel comfortable approaching their ex, the loan officer asked if they wanted to withdraw their application. Note this was before creditworthiness was determined. In this scenario, would you see it as appropriate to report this application as a withdrawal, or should it be denied? The argument is that the requirement for the ex-spouse to sign documents is seen as a customary closing condition, not anything to do with creditworthiness or underwriting, so it can be reported as a withdrawal. Your thoughts?

Approved but not accepted.

I apologize as I had just edited my post to clarify that creditworthiness had not been determined yet. It was still earlier in the application process.

I am confused. Exactly what documents was the ex-spouse going to be required to sign. Was the ex-spouse vested in the property and thus would have to sign the Deed of Trust? Otherwise, I cannot think of anything else they would be required to sign. I also assume this is homestead property.

While I am not certain as to all the details, you are correct. If he were to retain his rights to the property, it would be the Deed of Trust. If he were to relinquish those rights, I believe it would be a Quit Claim Deed.