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LTV/DTI on withdrawn loans

Home Forums Home Mortgage Disclosure Act LTV/DTI on withdrawn loans

This topic contains 1 reply, has 2 voices, and was last updated by  jholzknecht 10 months, 1 week ago.

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  • #14203

    kmullarkey
    Participant

    If we made a credit decision on a loan but the decision was based on obtaining an appraisal or obtaining the income documents & the customer withdrew prior to getting the appraisal and sending in the income documents, would we report NA on the LAR for DTI/LTV or should we report the actual DTI/LTV based on the original credit decision?

    #14215

    jholzknecht
    Keymaster

    Comment 4(a)(23) – 3 states, “If a file was closed for incompleteness, or if an application was withdrawn before a credit decision was made, a financial institution reports that the requirement is not applicable, even if the financial institution had calculated the ratio of the applicant’s total monthly debt to total monthly income.”

    This is a close call. According to Comment 4(a)(8)(i) – 13 if you issued an approval conditioned solely on customary commitment or closing conditions and the applicant expressly withdraws before satisfying all underwriting or creditworthiness conditions and before you deny the application or closes the file for incompleteness, then the application is reported as withdrawn. If the facts change even a little bit then the answer changes as well.

    • This reply was modified 10 months, 1 week ago by  jholzknecht.
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