Would love your thoughts on this one. An applicant applies and a bank counter offers to do the loan with a qualified co-signer. Applicant brings in mom the next day, but DTI is too high. The bank offers a deposit secured loan which the applicant accepts (as mom puts up money), but mom doesn't want to be on the deposit secured loan if she doesn't have too, so the deposit secured loan is just in the name of the applicant.

Is an adverse action notice needed for mom?

No - she is not a loan applicant.