Withdrawn loan applications

Posted By: Anonymous

Withdrawn loan applications - 07/13/09 03:35 PM

We have a loan in which the borrower was approved for the loan, but decided to go with another bank. For HMDA purposes, the lender put on the denial that it was approved, not accepted. Compliance dept-head says we should not report this, but shred it! My head is spinning right now!
Any suggestions out there on the next step to take? Am I the only one who has a HUGE problem with this? Help!
Posted By: Anonymous

Re: Withdrawn loan applications - 07/13/09 03:47 PM

I don't know about HMDA, we're not a reporting bank.

I keep all withdrawn applications in the same place as the denials and just note from the officer on the top of the application that the customer withdrew, decided to go with another bank, or did not return. When it is time to destroy the deinals, I destroy the withdrawn applications as well.
Posted By: Dan Persfull

Re: Withdrawn loan applications - 07/13/09 03:53 PM

Quote:
For HMDA purposes, the lender put on the denial that it was approved, not accepted.


Not sure what you mean by "on the denial" but reporting it as an approved but not accepted is the correct way to report this.

Quote:
Compliance dept-head says we should not report this, but shred it!



You need a new complinace dept-head!!

Posted By: David Dickinson

Re: Withdrawn loan applications - 07/13/09 09:22 PM

Quote:
Compliance dept-head says we should not report this, but shred it!

Wow! I hope you're kidding. You never shred ANY applications. This must be reported for HMDA and you must retain all info to support HMDA entries.
Posted By: Anonymous

Re: Withdrawn loan applications - 07/14/09 03:24 PM

Originally Posted By: Dan Persfull
[quote] reporting it as an approved but not accepted is the correct way to report this.


Couldn't this also be treated as a denial? What if the reason that the applicant went to a different bank is that we offered him 9%, and the other bank offered him 8%? Wouldn't that be refusal to "grant credit on the terms requested," thus triggering an adverse action notice under ECOA? In cases where we know that the reason for "approved but not accepted" has something to do with the terms of credit offered, we treat it as a denial. We send a combination denail-counteroffer letter, stating, "unable to provide what you requested, but, we can offer you the loan for X months at 9%." Is that wrong?
Posted By: Truffle Royale

Re: Withdrawn loan applications - 07/15/09 12:11 AM

I don't think that's right. You approved their appliation but they didn't accept it. If they called you and said 'no thanks we got a better offer up the street' and you know you can't better it, why do you complicate matters by sending a denial/counter-offer that you know will be refused? You were done when they said 'no thanks' whether they chose to give you a reason or not. Not to mention, you're skewing your LAR because you probably never have any approved but not accepted if you follow this procedure whenever you know the reason. jmho
Posted By: Al Miller

Re: Withdrawn loan applications - 07/15/09 02:51 PM

There are 2 possible scenarios. If the applicant asked for a loan at your "best" rate and you offer 9% and the applicant goes somewhere else for 8%, that is approved, not accepted.

If, however, the applicant asked for a loan at 8% and you counter with 9%, that unaccepted counteroffer is a denial.

A subtle distinction.

Al
Posted By: Anonymous

Re: Withdrawn loan applications - 09/03/09 10:41 PM

For retention purposes, would a approved but not accepted loan be treated the same as a withdrawn. Or, would you have a different retention period?
Posted By: Anonymous

Re: Withdrawn loan applications - 09/04/09 02:24 PM

A withdrawn loan application is generally considered to be when the applicant notifies the lender they no longer want their loan application processed. This must occur before a final credit decision is made or before an offer by the bank has occurred. If an offer has occurred but rejected by the applicant it is not considered a withdrawn application and no Adverse Action Notice is required.
The application and offer should be held as a customer refusal of offer and the documents should be held for your normal records retention period. These may be asked for in connection with a CRA-ECOA examination as proof of additional approved but rejected loans made by the bank. Noting the reason for the customer rejection on or with the application, if know may prove useful in determining/measuring the market absorption or failure of the product to be accepted in the community where it is being marketed if rejected by multiple qualified applicants.
Posted By: Anonymous

Re: Withdrawn loan applications - 11/27/13 09:13 PM

For application that are withdrawn by borrowers do you send an adverse action notice with the reason as withdrawn or do you send a courtsey letter stating the loan has been withdrawn? Does anyone have a sample of a withdrawal letter sent by the lender.
Posted By: manimal

Re: Withdrawn loan applications - 11/27/13 09:17 PM

Withdrawn loans do not require an Adverse Action letter.
Posted By: Anonymous

Re: Withdrawn loan applications - 11/29/13 04:47 PM

Do you send out any type of letter to the borrower?
Posted By: manimal

Re: Withdrawn loan applications - 11/29/13 04:50 PM

We don't, not sure if others do.
Posted By: KDF

Re: Withdrawn loan applications - 11/29/13 08:22 PM

We send a letter that says something like, "Because you have withdrawn your application we are closing out the file. Please contact us if we can be of service to you in the future".
Posted By: Anonymous

Re: Withdrawn loan applications - 01/30/14 04:08 PM

May I get a confirmation that a letter is not needed for a withdrawn commercial loan? I read somewhere that it depends on the annual revenues? Any direction to the reg. would be appreciated.

Thanks
Posted By: manimal

Re: Withdrawn loan applications - 01/30/14 04:55 PM

Check out the Notification requirements in 1002.9.

http://www.bankersonline.com/regs/12-1002/12-1002-009.html
Posted By: Rocky P

Re: Withdrawn loan applications - 01/30/14 05:18 PM

Originally Posted By: Anonymous
For application that are withdrawn by borrowers do you send an adverse action notice with the reason as withdrawn or do you send a courtsey letter stating the loan has been withdrawn? Does anyone have a sample of a withdrawal letter sent by the lender.

Why does the bank send a letter to the borrower regurgitating what the borrower told the bank? It's not required, using an AAN confuses too many people, and it becomes part of required documentation which the bank could be criticized for later for not providing.
Posted By: edAudit

Re: Withdrawn loan applications - 01/30/14 05:21 PM

(e) Withdrawal of approved application. When an applicant submits an application and the parties contemplate that the applicant will inquire about its status, if the creditor approves the application and the applicant has not inquired within 30 days after applying, the creditor may treat the application as withdrawn and need not comply with paragraph (a)(1) of this section

you only need to do it when "the parties contemplate that the applicant will inquire about its status"
Posted By: Anonymous

Re: Withdrawn loan applications - 09/04/14 02:15 PM

on a withdrawn application; if the application was verbally withdrawn by the customer due to better rate, etc. and we had already pulled credit to process the request before finding out the better rate, is the application approved not accepted or withdrawn?
Posted By: manimal

Re: Withdrawn loan applications - 09/04/14 02:24 PM

Approved Not Accepted is used when the FI approves the loan but the applicant still walks away. Did you approve the application before they withdrew?
Posted By: Anonymous

Re: Withdrawn loan applications - 09/04/14 02:38 PM

IT HADN'T MADE IT TO THE APPROVED OR DECLINED PHASE. THE CUSTOMER HAD WITHDREW BEFORE ANY DECISION WAS MADE
Posted By: manimal

Re: Withdrawn loan applications - 09/04/14 02:39 PM

Then it's withdrawn. There was no credit offer for the customer to 'accept'.
Posted By: Aggs

Re: Withdrawn loan applications - 09/04/14 02:48 PM

Originally Posted By: Anonymous
IT HADN'T MADE IT TO THE APPROVED OR DECLINED PHASE. THE CUSTOMER HAD WITHDREW BEFORE ANY DECISION WAS MADE


Why are you yelling? smile

I agree with manimal. The only time you have a "true" withdrawal is if you have not made any decision on the loan yet.

I say "true" withdrawal because I have dealt with too many lenders who think that anytime an applicant says "Forget it, I am going with ABC Bank instead" it's automatically a withdrawn application regardless of where we were in the decision process. Or that telling an applicant "Ooh, just pulled your credit, I don't think we can help you at this time" and having them say "Ok, forget it then" also means a withdrawal. crazy
Posted By: Anonymous

Re: Withdrawn loan applications - 09/06/14 01:55 AM

Can a mortgage lender give you a denial letter and then their mortgage broker write a letter "claiming its not a true denial" but that she did a withdrawal of the loan? We just had this happen, we suspected our realters and loan broker were conniving to force us into a close after we got an out of job transfer, the broker claimed she needed the transfer papers to withdraw the loan, it was 5 days after her notification and our loan was still open and the realters hot and heavy trying to coerce us to still go to close...we step sided her n went directly to the underwriter and they gave the loan denial letter..then the mortgage broker writes at the request of the realter...that our loan denial was not a true denial and it was a withdrawal of the loan and then takes a screenshot of our loan and sends this to us, the realters, and (LOL) our lawyer as retaliation for not closing the way they planned. What should the lender have done about this? Are their any agencies I should be screaming to about this denial letter and this "reclarification of the denial letter" to?
Posted By: Anonymous

Re: Withdrawn loan applications - 09/06/14 02:11 AM

We just had an incident over a mortgage loan, our loan was approved and ready to close and an unexpected out of state job transfer came, we notified our mortgage broker, she claimed she needed the transfer papers to withdraw the loan. Red Flag- we knew she didn't...we waited 5 days- the two realtors hounding and harassing us claiming we had to continue to close- and the loan was still open...realizing it was still open for "bad" we went directly to the underwriter and got a loan denial based on the occupancy requirement....well, they didn't like that at all...the mortgage broker writes an email at the request of the sellers realter....stating our loan denial was not a true denial and that it was a withdrawal. And takes a screenshot of our loan showing internally the underwriter had it under withdrawal...with no reason but in retaliation because the sellers realter was already asking for the earnest money release that we agreed to as a courtesy...sound like retaliation to any body else? What actions should the lender take with this complaint? Should I be complaining to any agency about this denial letter and the brokers "reclarification of it"? Yes, they were trying to facilitate mortgage fraud..they all were advised by us, the attorney that our loan couldn't close because of the mortgage occupancy requirement. I reported them, but I think they need inquiries from all directions for the proper flogging.
Posted By: rlcarey

Re: Withdrawn loan applications - 09/06/14 01:12 PM

Report the broker and the realtor to the proper State agencies.

File a SAR for attempted mortgage fraud.

But the broker and realtors (if you think they were actually involved) on your blacklist.

Review your internal process, as in what the [censored] does this mean "screenshot of our loan showing internally the underwriter". How does a broker have access to internal bank documentation?
Posted By: Kathleen O. Blanchard

Re: Withdrawn loan applications - 09/06/14 02:08 PM

I think this is a consumer posting.
Posted By: Truffle Royale

Re: Withdrawn loan applications - 09/06/14 11:55 PM

To the anon(s) with the questions about their loan, this site is for bankers.
We recommend you take your question to our sister site http://www.bankingquestions.com/ which is set up to answer questions from the general public.
Posted By: Anonymous

Re: Withdrawn loan applications - 09/09/14 05:42 PM

Have you even been to that website lately?

All the forum discussion posts are spam. crazy
Posted By: Anonymous

Re: Withdrawn loan applications - 09/11/14 04:26 PM

Wow. Okay guess not.
Posted By: rlcarey

Re: Withdrawn loan applications - 09/11/14 04:38 PM

What the heck are you anon's talking about??? Spam???? Explain.
Posted By: Justin Case

Re: Withdrawn loan applications - 09/11/14 07:55 PM

I can explain. If you take a look at the recent posts on the banking questions site, you'll see that all of the most recent ones are not even questions. It's just strings of random words. There hasn't been a lot of recent, legitimate discussions.
Posted By: rlcarey

Re: Withdrawn loan applications - 09/11/14 08:42 PM

Then the moderator should be deleting those IMHO.