AAN Timing

Good Afternoon,

I have a hypothetical scenario for you. We received an application for a HELOC 6/15/19. This is conditionally approved. On 7/10/19 we receive our Title Commitment, which reveals a judgment on the property. The loan officer agrees to give the borrower time to investigate the judgement. On 8/15/19 and 8/22/19 our officer leaves messages on the customer's cell phone looking for an update. On 9/1/19, after emailing, the officer speaks with the customer and learns the customer is facing difficulty getting an exact amount owed on the debt. The officer agrees to give the customer more time (let's say 4 weeks). After no successful contact despite repeated attempts with the customer throughout October, on 10/29/19, our loan officer decides to deny the HELOC request for "Collection Action or Judgment" pursuant to what was revealed on the Title Commitment. Normally, compliance would note an exception because we did not sent the denial letter within 30 days of receiving the information that led to the denial.

Or, is this not an exception because the decision to deny came as a result of the customer's failure to respond to contact attempts?

Thank you for your time on this one.

R. Shackleford

The customer failing to reply to your contact attempts has no bearing on your notice timing requirements under the regulation.

If the "conditional approval" had been done in writing with what conditions had to be met and by what time they had to be met would have resolved the timing requirements.

That's what I was afraid of. Let's say that as far as I could see, the conditional approval was not in writing, and documentation is very weak. Sounds like an exception. Would I be on solid ground in saying so?

The bank knew of the judgement on 7/10/1, assuming the LO could not move forward without resolution to the judgement, we would have started the 30 day clock in order for the judgement to be resolved.

It sounds as though your conditional approval changed from a "Yes" (based on what was known) to a "No"; we would have required documented resolution within 30 days of 7/10/19, or a notice of denial sent.

We would write it up.

I agree with Gertie's assessment.

Thank you both for your time on this. Have a great day!

R. Shackleford