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#425494 - 09/20/05 08:01 PM adverse action notice

We had a customer apply for a loan using a pickup as collateral and with a personal loan application. We would have to take a second lien on this pickup and therefore would not meet our LTV guidelines. We turned down this specific loan request but stated in the counter offer section we would offer credit if we could take a first lien position or if the customer provided collateral of equivalent value. First question is it acceptable to put the word “denied” in the description of action taken section of the adverse action notice. Should we use the word accepted as long as we listed the conditions that must be met before we accept? One more question, we accidentally used a business adverse action notice instead of a consumer. Is this okay or do we need to do a consumer adverse action notice and resend a new notice to the customer? Thanks for the help.

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Lending Compliance
#425495 - 09/20/05 08:49 PM Re: adverse action notice
Beagles22 Offline
Power Poster
Joined: Jan 2004
Posts: 3,626
State of confusion
I would send a consumer adverse action saying denied. It was denied on the terms they wanted and you used a commercial denial. Just my opinion.
Going to church doesn't make you a christian any more that standing in your garage makes you a car.

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#425496 - 09/21/05 01:49 PM Re: adverse action notice
GreatBlue Offline
Diamond Poster
Joined: Feb 2003
Posts: 2,362
It sounds like what you sent was a combination adverse action / counter offer. That's acceptable. You do need to tell them they were denied for the loan applied for.

As to whether the commercial vs. consumer notice was appropriate, it depends on whether the notice sent contained all the elements required by 202.9(a)(2)
Opinions are mine and not necessarily my employer's.

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