Declined Loans - Required Disclosures?

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Question:

What are the required disclosures for declined loans and what are we required to keep in the file for audit purposes on declined loans?

Answer:

Refer to Section 202.9 for the Adverse Action Notice disclosure requirements. You also need to provide applicable disclosures until the decision to deny the loan has been made. Collect GMI, Servicing Disclosure, GFE, ARM disclosures, etc. You must retain all information used in your decision to deny the applicants. Refer to Section 202.12(b) for specific information as the retention schedule varies depending on consumer vs. commercial purpose loan requests.

First published on BankersOnline.com 9/17/07