Hello - any guidance with this issue is appreciated. If we issue a counteroffer (which includes a counteroffer notice indicating the old terms and new terms being offered, an AA Notice with the reasons the original loan was not acceptable, and a Commitment letter based on the new terms if we are able to), and the borrower accepts the counteroffer verbally or by signing the c/o notice and new Commitment, but the property falls through later in the process - would this be considered a denial or approved but not accepted? The 2003 GIR states that code 3 should be used if "the applicant turns down or fails to respond" to the counteroffer. In this case, the applicant is accepting the counteroffer, and has responded to the counteroffer - but they are losing the property through no fault of their own. Thanks in advance for any advice/reference...

I would report it as "approved but not accepted".

Thank you for the response - are you aware of anything in GIR, Reg C, or the Commentary that I can point to for support? According to GIR as far as I can see, counteroffers are either 1 or 3, but they don't seem to address all of the possible outcomes of a counteroffered loan.

I tend to agree but I do have some reservation. If the purchase of the property fell through, they no longer can meet the collateral requirement of the commitment, therefore it very well could be a denial based on collateral.

I could support either classification.

Dan - thanks for the response (as well as your Compliance wisdom in general). My only issue with considering the app a denial for collateral is that it would be inconsistent with our procedures for non-counteroffered applications. For example, if we approve and Commit an application on terms requested, and the seller walks away from the closing table, we consider it Approved but not Accepted.

In my original scenario above, I tend to lean more toward AANA rather than denial, but I'm being challenged on it and have nothing to reference. AANA would seem to fit more in the spirit of what is intended.