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#2248217 - 01/27/21 11:53 AM
Re: Adverse Action on Conditional Approval
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10K Club
Joined: Jul 2001
Posts: 83,363
Galveston, TX
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I am sorry - what appraisal notification are you referring too?
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#2248223 - 01/27/21 02:58 PM
Re: Adverse Action on Conditional Approval
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10K Club
Joined: Jul 2001
Posts: 83,363
Galveston, TX
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A counter-offer is a counter-offer. If you told them that we will not make you a loan for $60K but will make you a loan for $30K and they say OK - then I do not believe you can come back then say - oh sorry, now you have to also meet an LTV requirement if you failed to tell them that. Not much of a counter-offer if that is what happened.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2248242 - 01/27/21 03:53 PM
Re: Adverse Action on Conditional Approval
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10K Club
Joined: Jul 2001
Posts: 83,363
Galveston, TX
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Try the dictionary: an offer made in response to a previous offer by the other party during negotiations for a final contract. Making a counter offer automatically rejects the prior offer, and requires an acceptance under the terms of the counter offer or there is no contract. Example: Susan Seller offers to sell her house for $150,000, to be paid in 60 days; Bruce Buyer receives the offer and gives Seller a counter offer of $140,000, payable in 45 days. The original offer is dead, despite the shorter time for payment since the price is lower. Seller then can choose to accept at $140,000, counter again at some compromise price, reject the counter offer, or let it expire.
If the counter-offer includes additional conditions, they would have to be stated. Otherwise - when the customer's attorney shows up at the bank and they have a piece of paper in their hand that says the bank agrees to make them a loan for $30K - what does the lender plan to tell the judge during the breach of contract suit?
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2248258 - 01/27/21 04:56 PM
Re: Adverse Action on Conditional Approval
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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1002.9
(iv) 90 days after notifying the applicant of a counteroffer if the applicant does not expressly accept or use the credit offered.
If you put conditions on a "counteroffer" then you are not offering the applicant credit on terms different than what were applied for. You are simply telling the applicant we won't approve your loan request as is but if you do this or that we will reconsider your request.
A counteroffer is informing the applicant based on the information provided we cannot make the loan as requested but we can make you a loan for X based on this information.
And I agree with Randy you need to inform the applicant about all conditions that need to be met for the reconsideration.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#2248263 - 01/27/21 05:42 PM
Re: Adverse Action on Conditional Approval
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10K Club
Joined: Jul 2001
Posts: 83,363
Galveston, TX
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I highly suggest that you get legal counsel involved if you are issuing conditional commitment letters.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2248280 - 01/27/21 08:35 PM
Re: Adverse Action on Conditional Approval
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Platinum Poster
Joined: Nov 2013
Posts: 549
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That could be confusing to the consumer, but the process is compliant. I just personally think that the process, although compliant, could create confusion for the consumer.
You are kind of saying it right there. Technical compliance is not an insulator to UDAAP violations. Twice you state it might be confusing for the consumer. If a banker thinks it might be confusing, a consumer is likely going to find it confusing. And if the terms/requirements/specs, etc. are confusing - that is a very easy jump to an Unfair practice, or perhaps even Deceptive. Intent to harm isn't require for a UDAAP.
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#2252376 - 04/14/21 09:32 PM
Re: Adverse Action on Conditional Approval
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Diamond Poster
Joined: Nov 2006
Posts: 1,407
California
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We have a situation where the applicant's income did not support the loan amount requested so we did a counteroffer for a lesser loan amount due to income. The borrower then provided more income documentation, thinking it would support his initial request, however in evaluating that additional income, it actually lowered his income such that we then could not make the loan as counteroffered and declined the loan. Our counteroffer also had conditions and was not a commitment to lend. However, based on the comments above, it appears that a counteroffer letter is considered a commitment?
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