A consumer loan application (HMDA reportable, BTW) was denied at underwriting and an adverse action with no counter offer was sent. A few days later, applicant (with no new "application" is back in the cue and loan is approved by another loan officer. I'm thinking the newly approved loan needs to be considered a new application because the first application resulted in a straight-out denial and was adverse actioned. The only time we continue the same application is on counteroffers and product changes (i.e. HE changes to HELOC).

Any thoughts?

HMDA aside, sounds like you have some really big fair lending issues if loan approval can be granted by one loan officer and not another within your institution.

You need to have a 2nd review process, and earlier than later. Loan officers have different experience and authorities which allow some to be more flexible (read as to take higher risks than another loan officer).

Imagine the problems (like Randy mentioned) if two identical applications came to the bank. The prohibited basis applicant was denied and the non prohibited basis applicant approved. The regulators and DOJ would have a field day!

Although I appreciate the thoughts about the "issues" surrounding the first application (in which there was a second review process), my real question was: is the new approval considered a new application since the "first" loan was denied. In other words: can you reconsider a loan application once it's been denied with an adverse action?

As long as the process fits within your policy and procedures there is no regulatory prohibition from reconsidering an application after action has been taken on it.

The HMDA Reporting Getting it Right Guidelines addresses reinstated applications and how they are to be reported.