counter offer question

Can someone please tell me where I can find a definition for "what is a counter offer". I have someone who insists on being shown an "official" definition of what a counter offer is to compare to a denied loan.

The thinking here [not me] is that it is considered "counter offered" when they they are denied thru the credit score system but hold the documents to allow them time to bring in a co-signor or guarantor to make a good loan.

My explanation is that they were denied [adverse action notice not counter offer]. Bring in someone/something to the table to work with - then get approved - end of story. Thoughts, information, etc.?

You will find no "formal" definition that I'm aware of, however, from 202.2

(c) Adverse action.

(1) The term means:

(i) A refusal to grant credit in substantially the amount or on substantially the terms requested in an application unless the creditor makes a counteroffer (to grant credit in a different amount or on other terms) and the applicant uses or expressly accepts the credit offered;


Simply telling an applicant you will reconsider the application if they provide a co-signer is not a counter-offer. You have made no "counter-offer" to grant credit. You have only placed an underwriting condition on the loan request that must be met before you will grant credit, therefore you have denied it as applied for.

Thanks Dan. I have searched to no avail and could not find a direct definition. You have confirmed the information that I passed along to the lender about this not being a counter offer.

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