Thanks to all for the responses. I would have been dealing with this at the time of the transition, but I'd just started at this Bank and was told the business line had it covered. I presumed my predecessor would've helped the business line get to the best possible process; that's what I get for not confirming for myself, I guess.
At this point, I don't know which would be worse: (1) reporting the original application files on the HMDA LAR as denied with the "new application needed" reason, and reporting the new application files as if they were new applications; or (2) marking the original application files as non-reportable, manually changing the LAR data for the new application files to reflect the original application date, and then having to explain why the application date in the LAR for those files doesn't match the application date in our system.
Option 1 is going to slightly inflate our # of denied loans, and total # of loans/applications. Option 2 is going to give us LAR data that is accurate, but not supported by our files. (Having to explain why borrowers got a new LE based on the new 1003 doesn't sound like fun, either.) No good options here; any opinion on which is least bad?