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Incomplete Application vs Inquiry (HMDA)

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Question: 
If an applicant starts to apply for a mortgage loan online and early in the process authorizes a credit bureau to be pulled but then never submits the application, are we required to do anything with the information such as send a letter of notice of incomplete application and report on HMDA LAR or is this considered an inquiry that never resulted in a HMDA application?
Answer: 

Without an application for credit, you have no permissible purpose to pull a credit report on the consumer. Therefore, you have an application from a Regulation B perspective and depending on how much information was completed on the application, you have an application for HMDA, i.e. address of the home being purchased or refinanced, amount of credit requested, etc. I would highly recommend that you look at this process to ensure that an application cannot be submitted without core application fields being completed and a credit report is not pulled until that happens.

First published on BankersOnline.com 8/27/12

First published on 08/27/2012

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