In one of our recent HMDA webinars, we received the following question:
Question: We approved an applicant, subject to a 70% loan-to-value ratio, but the appraisal came back much lower than anticipated. As a result, we offered the applicant a lower loan amount than what they applied for, but they declined and did not want to move forward. Should this application be reported as denied or approved but not accepted?
Answer: Loan-to-value is an applicant condition. Essentially, the applicant is asking for too much money to meet your loan-to-value requirements. In this case, you told them you could not make the loan on the original terms and provided a counteroffer that was not accepted. Since you denied the original request and the counteroffer was not accepted, you should report the application as denied for HMDA.
HMDA has very specific instructions for reporting the action taken. Counteroffers make the water a little muddy because the action taken code you report often depends on the applicant’s response to your counteroffer.
David walks through another example in the video.
Published 2026/03/09
