auction

Posted By: DoS

auction - 12/11/14 03:20 PM

I'm stuck on this one and need some advice.

Customer owns a chunk of land and comes to get "prequalified" to bid on a house that the local high school built and will auction off. they plan to move it onto the property.

They do not "win" the auction and never contact the bank again.

1. is this reportable as a purchase?
2. if so, what would the denial reason would be? (or would it be withdrawn?)
Posted By: swiggles

Re: auction - 12/11/14 03:24 PM

No denial reasons....it's not a denial. If you have a property address.....which you do......the loan cannot be a pre-qualification. For HMDA, I would report as withdrawn.

....just my opinion....anyone care to shoot me down??
Posted By: Truffle Royale

Re: auction - 12/11/14 03:34 PM

Does it have a property address or was it built to be moved and sold? If so, it's like buying a pre-fab house, imho. Until it's actually put on the foundation it doesn't have an address so it could still be a prequal.
Posted By: Dan Persfull

Re: auction - 12/11/14 03:39 PM

Well it will all depend how the loan commitment was structured. Without that information we really can't opine whether the transaction is a denial, closed for incompleteness or an approved but not accepted but I really don't see where a withdrawal would be applicable because it does appear a credit decision was made.

Review the Conditional Approval sections.

http://www.ffiec.gov/hmda/faqreg.htm#action
Posted By: Dan Persfull

Re: auction - 12/11/14 03:44 PM

Until it's actually put on the foundation it doesn't have an address so it could still be a prequal.

I don't agree. Using that logic then the purchase of a mobile (manufactured home) or modular home would never be reportable because what you are saying is that until the home is actually set on the foundation then you do not know where it's going to be located.

The applicant intended to purchase the pre-built home and move it to land they own therefore they had the property identified IMO.
Posted By: swiggles

Re: auction - 12/11/14 03:44 PM

I guess I was thinking that there IS a property location for the house....the house just isn't there yet.
Posted By: DoS

Re: auction - 12/11/14 03:51 PM

the loan was approved pending additional underwriting criteria (appraisal, site survey, etc.)

The house was built by students on school property to be moved off of school property upon the sale to the highest bidder.
Posted By: DoS

Re: auction - 12/12/14 04:20 PM

to recap it IS reportable

It would be reported as "approved not accepted" (based on Dan's link)

Is this correct?

This whole transaction confuses me ....
Posted By: Dan Persfull

Re: auction - 12/12/14 04:31 PM

the loan was approved pending additional underwriting criteria (appraisal, site survey, etc.)

It would be reported as "approved not accepted" (based on Dan's link)

Is this correct?


Based on the information you have provided if you gave the applicant a written conditional approval advising them the need for an appraisal, survey, etc. and one was not obtained due to the inactions of the applicant then you will report this as a closed for incompleteness.

If you only gave them a verbal commitment then you will report this as a denial for an incomplete application.

See the Conditional approvals---failure to satisfy creditworthiness conditions discussion in the above link.
Posted By: DoS

Re: auction - 12/12/14 07:35 PM

got it, thank you, Dan.
Posted By: DoS

Re: auction - 12/12/14 08:24 PM

alright, upon further discussion we also don't have a physical address yet. We have the description but no street address.

the guide states "If information about the potential site of a mobile or manufactured home is not available, an institution reports using the Code for “not applicable.”"

Even though this is not a mobile home would I still report it as "NA"? or should I pull up the map and search it that way?

this loan is making me feel REAL dumb!
Posted By: swiggles

Re: auction - 12/12/14 09:11 PM

Talking off the top of my head here, but if there is a location....a piece of dirt.....it doesn't have to have a street address.....a legal description or metes and bounds is still a location.
Posted By: SMQ, CRCM

Re: auction - 12/14/14 09:56 PM

Agree with swiggles, the applicant has told you he will put it on his land, you have identified the "dirt". Street address not required, you will need to report the location.
Posted By: SMQ, CRCM

Re: auction - 12/14/14 10:11 PM

Agree with swiggles, the applicant has told you he will put it on his land, you have identified the "dirt". Street address not required, you will need to report the location.