We received a great question from a Monthly Connection member at our April meeting. It went something like this:
Can you talk about denials of prequalification inquiries/applications that likely meet the definition of an application under Regulation B but are not an application under HMDA (we don’t have a pre-approval program) or TRID? The scenario is a customer contacts us about a mortgage loan, authorizes us to pull credit, provides some financial information, asks how much of a home they’d qualify for, etc., however they haven’t yet identified a property. Sometimes their credit score is under what we know our investor and/or government agencies (VA/FHA) require. And, we sometimes have sufficient information to know that we would not originate the application as a portfolio mortgage loan. I believe this scenario meets the Regulation B definition of an application and an Adverse Action Notice must be provided within 30 days but some of our loan originators are pushing back.
Listen to Jerod’s answer in the video. You can access the document Jerod references here.
Published
2025/04/17
