Adverse Action Notice - withdrawn app

What he said.

Seriously, I agree with Andy. I don't have to prove it, but you're right Dan, there had better not be comments that said we were going to deny or it will be harder to argue the withdrawal.

If the loan was approved, but there were several conditions and the customer "withdrew", would you consider that Withdrawn, Denied for Incomplete App, or Approved Not Accepted? In some cases, we need several conditions satisfied to change the application status from "approved with conditions" to "approved to close". Any thoughts are appreciated!

Approved with conditions is not approved and would require either a notice of incompleteness or a denial notice. You could not treat it as a withdrawn, because a credit decision had already been made.

An application "approved with conditions" is not IMO an approved application.

You're saying if you meet this condition we will be able to approve your loan, but if you can't meet this codition we cannot approve your loan as requested.

I say you owe this person an AAN.

O.K. Dan, You'll love this one. A loan officer put on the AAN as reason for denial, "counter offer not accepted."

I had to explain to him that he actually denied the original loan request and I wanted him to list the real reason(s) he denied the request.

I think we may have twin officers.

As much as I respect Dan's and Randy's judgment, I will continue to press my case on this one. The applicant indicated at application that he did not want to payoff his equity line, but wanted to subordinate it to our lien. We issued a commitment on those terms, exactly as he requested.

According to Getting It Right , code 3 (application denied) includes a situation when an applicant fails to respond to a counteroffer. What is a counteroffer? Two paragraphs above in the book, counteroffer is parenthetically defined as "your offer to the applicant to make the loan on different terms or in a different amount than initially applied for" [emphasis mine]. In this situation, we have not offered different terms, nor have we offered a different amount. We have approved the loan as requested.

Let's say the applicant never informs us that the equity lender refuses to subordinate. And let's say he never closes on the loan. Would you agree that this application is coded 2 (approved but not accepted)? GIR says to use this code when the loan is approved but the applicant "fails to respond to your notification of approval or your commitment letter within the specified time."

So, if I know why the applicant did not close, I report it one way (3), and if I don't know why the applicant did not close, I report it another way (2)? That would make my knowledge--or the lack thereof--the definer of the application's disposition. In that case, "don't ask, don't tell, don't pursue" would seem a reasonable policy.

Stephen, lets talk apple to apple here. The post had to do with an AAN (or at least that's how I took it based on the thread's title), not how to report it for HMDA.

However, page D-10 of the GIR #4

Action Taken - Conditional Approval (Which you have becasue your committment had the condition that a subordination be granted by the other lender) . If an institution issues a loan approval subject to the applicant’s meeting underwriting conditions (other than customary loan commitment or loan closing conditions, such as a “clear title” requirement or an acceptable property survey) and the applicant does not meet them, the institution reports the action taken as a denial .
(Appendix A of this part, Para-graph
V.B.)

So, as far HMDA you may be allowed to report it as "approved not accepted", because your subordination condition would be the same as "clear title" - since the applicant does not have "clear title" due the other lien you would be able to report it "approved not accepted", however, IMHO, you must send the applicant an AAN under Reg. B.

Dan,

Your first point is well taken. I was so focused on the treatment of the application that I failed to notice the "AAN" in the thread title. Mea culpa, mea culpa.

As to your second point, I would argue that the phrase "customary loan commitment or loan closing conditions" is sufficiently vague to generate legitimate differences of opinion as to what conditions would or would not be included within the confines of this phrase.

Finally, your third point, that the application may be treated differently under Reg B and Reg C, is absolutely valid. This difference of treatment, or difference of definition, under these two regulations in particular drives me nuts.