Withdrawn Application with Change of Circumstance

Customer applied as an individual for a FHLB loan on 10/21/15 for $142,000. 10/26/15 requested loan increase to $150,000 (new loan estimates sent). 12/3/15 Notice of Action taken/Counteroffer sent (FHLB would not accept the appraisal, comp issues). Customer Withdrew application on 12/4/15 and applied jointly with wife on 12/4/15. Lender did originate an in house loan on 12/16/15. Is the Original application a Denial or Withdrawal? What loan amount do we report?

They closed the counter offered loan. You have a loan and nothing more.

Sounds like you have two separate applications here. The first is the husband's application for the FHLB loan for $142,000. If the FHLB application was countered, but the borrower did not accept, you have a denial of the original application. (You did send a denial, right? ) You report this as a denial of $142,000 for him.

Then you have a second application from two people that was originated and should be reported as such at whatever amount you closed the loan at.

There was a new application for the originated loan because he added his wife to the application.

I agree with TR, except I believe that the amount to report on the first application is the requested increase of $150,000.00. The husband requested the change and the bank heard the request and updated and sent new LE's.

Then I stick by my answer that you have two separate application entries for HMDA.

Or, as i think Randy was saying, you could treat this as a reinstated application and just report the originated loan. I believe it would be your choice whether to have 1 or 2 LAR entries in this scenario, and i'd always choose 1.

While I normally try to keep an application going, in this instance you have different product, different program, different borrowers = too many differences for me to be comfortable carrying this forward as a single application.

I would now probably lean more towards TR's opinion. In my first read I missed the fact that the wife was added.

Randy, always like getting your take on things: you believe the 'reinstated' application absolutely doesn't work? I guess i'm looking at the addition of the wife to the application much as i would any other borrower-requested change, but would like to hear your take.

To add....i'm looking at this strictly from a HMDA point of view (not a Reg. B one, for whatever that's worth).

IMHO - I think you could call it either way. This all happened simultaneously so it could all be one giant application with a counter-offer in the middle if you wanted it too. It would be no different than telling a person no, but we would do it with a co-borrower and you just revised the application because they come back in the same day with a co-borrower. The product switch isn't a big hang up for me.

Thanks....i agree re: the product switch.