Trying to figure out what loan amount should be reported on the HMDA LAR.
Application states $104,000 loan amount. During the processing of the loan the value became $102,000 and the loan amount was reduced to $90,000. However the loan was subsequently denied for lack of funds.

If we report the loan amount for which the applicant applied for ($104,000) our CLTV goes negative on the LAR because we only have the $102,000 value to report. We know we can report this as a negative….but should it really?

From Reg C:
3. Covered loan amount—preapproval request denied, application denied, closed for incompleteness or withdrawn. For a preapproval request that was denied, and for an application that was denied, closed for incompleteness, or withdrawn, a financial institution reports the amount for which the applicant applied.

Any thoughts would be appreciated.
Thanks.

If you reduced the loan amount to $90k, the applicant still asked for $104k. Sounds like you were going to counter them. I think you should report $104.

What if a borrower requests a change in loan amount prior to our making a decision? We have been documenting our file with the request and reporting that updated amount. Is this incorrect? This is most common when we have an online application come in and a loan officer discusses the loan structure and purpose. Sometimes the borrower requires more, or less based on that discussion.

If the borrower requests a change before a credit decision, I would go with the last amount they requested. The OP appeared to be asking about a bank-initiated change (i.e. counteroffer), which is a different situation. When an applicant requests a change before you make your decision, I view that as them finalizing what they are applying for (assuming, of course, that your lender is not steering them to different terms similar to a counteroffer).

While there really isn't any specific guidance on this, it is similar to the counteroffer guidance for 1003.4(a)(8) where the preamble to the final rule states the following:

"The Bureau proposed to clarify that, if the applicant agrees to proceed with consideration of the financial institution's counteroffer, the counteroffer takes the place of the prior application, and the financial institution reports the action taken on the application under the terms of the counteroffer."

And...
"...where the applicant agrees to proceed with consideration of the financial institution's counteroffer, the financial institution reports the action taken field as the disposition of the application based on the terms of counteroffer."

Thanks Adam!

Can you direct me where to find the preamble? I have searched and searched and can't find it. Is it in the federal register?

https://www.govinfo.gov/content/pkg/FR-2015-10-28/pdf/2015-26607.pdf
It's start in Section V on page 66137

David, thank you.