I have a situation where the borrower wants to borrow $90K, the appraisal comes back at $95K, rerun them thru LP and I get an accept but must have PMI.

Am I going to have an adverse action based on insufficient collateral, and then counter offer doing the loan with PMI approval?

Thanks for any help!

any ideas?

You would offer the counter-offer and then deny if they fail to accept or turn it down within 90 days. Our forms allow us to do this on the same document.

Thanks waldensouth, that is how my AAN is completed, but I was second guessing myself.

They applied for $90K and you approved them for $90K. If they don't like the terms of the approval (with PMI) that is not a credit denial.

So Randy are you saying it should be 'approved, not accepted'?

How have you denied lending them $90K?

That makes sense Randy. I will correct my HMDA lar, and make note in the file. Thanks again.

Having a blonde moment here - I am reviewing an AAN with the reasons (DTI) and (Ineligble for PMI).

The customer didn't apply for a loan with PMI, so I am thinking we shouldn't have that on the prequal denial. If we are supposed to, would that mean you check the "outside source" box on the AAN? When I asked how they knew he was ineligible, they said "everyone knows the eligibility rules for PMI" (I don't).

HELP!

I had a similar issue. I ended up just indicating the primary reason for the denial on the AAN: CREDIT; Excessive Obligations; Insufficient Income for Total Obligations. I didn't bother to reference the PMI, as it wasn't apart of the application, and a counter offer wouldn't have been relevant.

Thank you!