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#39300 - 10/28/02 09:50 PM Reg B Counteroffer/Denial
Liz F Offline
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Liz F
Joined: Jun 2001
Posts: 23
I am trying to determine the content of a denial notice in the following situation:
A customer applies for a $50,000 loan and they only qualify for $40,000. A written adverse action notice is provided informing them of the counteroffer amount of $40,000. The customer does not accept the counteroffer, therefore we must provide them with an adverse action notice (denial) within 90 days of the date of the counteroffer. Is the denial for the original application amount $50,000 or for the counteroffer of $40,000?

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#39301 - 10/28/02 09:54 PM Re: Reg B Counteroffer/Denial
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,765
Bloomington, IN
It would be for the $50,000. That was the original loan request and that's the request you denied.
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#39302 - 10/28/02 09:54 PM Re: Reg B Counteroffer/Denial
Bartman Offline
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Bartman
Joined: Oct 2000
Posts: 1,191
Springfield
The $50,000 request is the one you denied. Likewise, this is the amount to report on the HMDA-LAR if the application is HMDA-reportable.
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#39303 - 10/28/02 09:55 PM Re: Reg B Counteroffer/Denial
ahou Offline
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ahou
Joined: Aug 2002
Posts: 3,094
Loan amount originally requested.
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Opinions are my own and not of my employer.

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#39304 - 10/28/02 09:59 PM Re: Reg B Counteroffer/Denial
Liz F Offline
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Liz F
Joined: Jun 2001
Posts: 23
Thank you all for your quick replies!

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#39305 - 10/28/02 09:59 PM Re: Reg B Counteroffer/Denial
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
I agree with the above posts. Next time issue a combined counter-offer and denial. This way you don't need to worry about pulling this out of the files (for up to 90 days). Once you send out the initial notice, you are done with it, unless the customer resurrects it.

Refer to the Commentary to Section 202.9(a)(1) #6:
A creditor that gives the applicant a combined counteroffer and adverse action notice . . . need not send a second adverse action notice if the applicant does not accept the counteroffer.
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David Dickinson
http://www.bankerscompliance.com

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#39306 - 10/28/02 10:00 PM Re: Reg B Counteroffer/Denial
Anonymous
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If the notice you provided as a counter offer contained all of the disclosures (Reg B/FCRA/reasons for decreasing amount requested, etc) and a date for acception the counteroffer by, you do not have to send another notice if they reject the offer. And yes, if it is HMDA it would be a denial for the original amount requested.

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#39307 - 10/29/02 02:53 PM Re: Reg B Counteroffer/Denial
Liz F Offline
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Liz F
Joined: Jun 2001
Posts: 23
Thank you all again. Just to make sure I'm clear on David's point, if I provide one adverse action notice that contains all required disclosures, and that sets forth a denial for the $50,000 and a counteroffer for the $40,000, if the customer never accepts the counteroffer, I do not have to mail out a second adverse action notice, again denying for the $50,000???

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#39308 - 10/29/02 02:59 PM Re: Reg B Counteroffer/Denial
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,765
Bloomington, IN
That's correct. However, I would suggest putting a time limit on the counteroffer. It should say something like "if we do not hear from you by xx/xx/xx, no further action on your request will be taken." I suggest to our lenders a 30 day period.
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The opinions expressed are mine and they are not to be taken as legal advice.

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