Answer by Andy Zavoina:
Yes. There would be no other factual reason. Documenting the loan file that there was a change in policy, approved by the board, will answer questions if consistency in underwriting standards are questioned.
Answer by Lucy Griffin:
Absolutely send the adverse action notice. Always tell the truth and the whole truth when giving reasons for denial. You could save yourself a call from this customer if you take the time to note on notice that the policy has changed. But you wouldn't have to do this. And, as Andy suggests, documentation in the file will help answer questions in the future.
Flood - Dodging the BIG Wave , presented by Lucy Griffin and David Dickinson
First published on BankersOnline.com 2/2/03