Prequalification denied- now app/ HMDA reportable

Posted By: CaseyBoo30

Prequalification denied- now app/ HMDA reportable - 05/04/12 03:10 PM

If a prequalification was denied (adverse action notice sent) changing it from an inquiry to an application, and the application is missing key information needed for hmda reporting, how should this be handled?
Posted By: raitchjay

Re: Prequalification denied- now app/ HMDA reportable - 05/04/12 03:28 PM

Denied prequals aren't HMDA reportable. See the GIR.
Posted By: CaseyBoo30

Re: Prequalification denied- now app/ HMDA reportable - 05/04/12 03:42 PM

In FIL-35-96 is says that once a loan officer has denied a prequalification that it then becomes an application and Reg B and Reg C documenation requirements are triggered.
Posted By: Kathleen O. Blanchard

Re: Prequalification denied- now app/ HMDA reportable - 05/04/12 03:49 PM

From the current GIR (this instruction supercedes old 1996 guidance):

2. Prequalification. A prequalification
request is a request by a prospective
loan applicant (other than a request
for preapproval) for a preliminary
determination on whether the prospective
applicant would likely qualify
for credit under an institutionís standards,
or for a determination on the
amount of credit for which the prospective
applicant would likely qualify.
Some institutions evaluate prequalification
requests through a procedure
that is separate from the institutionís
normal loan application process; others
use the same process. In either
case, Regulation C does not require
an institution to report prequalification
requests on the HMDA/LAR, even
though these requests may constitute
applications under Regulation B for
purposes of adverse action notices.
Posted By: CaseyBoo30

Re: Prequalification denied- now app/ HMDA reportable - 05/04/12 03:54 PM

Thank you very much.
Posted By: CaseyBoo30

Re: Prequalification denied- now app/ HMDA reportable - 05/04/12 04:09 PM

One more question. If the loan officer obtained monitoring information on the denied prequalificatio, is this an issue since it is not HMDA reportable? Or does the FIL come back into play since it is an application for Reg. B purposes.
Posted By: nikicole03

Re: Prequalification denied- now app/ HMDA reportable - 11/20/12 11:09 PM

It states:
Quote:
In either case, Regulation C does not require an institution to report prequalification requests on the HMDA/LAR, even though these requests may constitute applications under Regulation B for purposes of adverse action notices.


It's not required, but are we allowed to report these on the LAR if we have all the required data elements?
Posted By: Kathleen O. Blanchard

Re: Prequalification denied- now app/ HMDA reportable - 11/20/12 11:27 PM

That is their way of saying these are not reportable applications under HMDA.