Customer indicated gambling losses on his tax return but everything else is in order. No debt to income problems or credit problems. Loan Officer wants to deny because he believes the losses exceed what is listed. Historical tax returns show losses every year. Is it possible to deny without proof of additional losses? If so, what would be the correct reason.

I would think if he was going to fudge on the return he'd claim more losses than he had rather than less.

If your documentation does not support it, you have no valid reason IMO. Unfortunately the lender's gut doesn't play into this scenario unless he can substantiate the feeling.

While I agree you need something to back up the reason for denial, the bottom line is, there are a few reasons you cannot deny someone, everything else is OK, as far as Reg. B is concerned. Other issues come into play, your policies, equal treatment, etc. In this instance the lender needs to find something they can hang their hat on and deny the request, even if it is subjective, or decide that maybe it is do-able.