I have an auditor here that has brought an issue on our reasons for denials. He is stating that the loan officer should of added some more information. I guess my question is if the loan officer makes the decision on why he is denying a loan based on information in the credit report who to say they are wrong if they do not use the decisions the auditor feels is appropriate. For example, the customer files bankruptcy but we did not use that reason are we wrong. Is there a set rule, I have read the regulation and I can't find where it states you should use the first 3 things on the credit report. Compliance is really stressing me out!!!!!!!!!!!

I believe what the auditor is trying to tell you is this:

The loan officer runs a credit report on an individual and see's a bankruptcy and past due credit. He/she then denies the loan for past due and doesn't mention the bankruptcy. The customer receives the past due and says 'Wait a minute - I've never been past due' and clears up the report since that belonged to someone with a similar name. However, the bankruptcy is theirs. Is the loan officer then going to deny due to bankruptcy?

My feeling is we should list all of the reasons for denial - up to 4. We are telling the customer that if they fix these issues then we can lend them money. If we don't list something they may not be aware.

Does that make any sense?

Yes it does thanks a million, now may I ask a different question?

Loan Officer is doing a loan for home improvement secured by an additional advance cluase in the mortgage which is the customers principal dwelling doesn't RESPA apply and they should receive a Good Faith Estimate, etc?

Yes it applies - and so does rescission.

I just want to say a big Thank you, and I appreciate you answering me and not making me feel like a dummy. I work in a small bank and sometimes I run into brick walls with loan officers.

Join the club.

We all have knots on our heads!