December 19, 2012 at 2:38 pm #2645GhollowayParticipant
We have our mortgage division centralized and any interested borrowers are referred to this division. In order to facilitate and streamline the process we have one person calling the potential buyers to understand their request, are they rate shopping, just gathering info for a future loan application, and type of transactions etc so that they are routed to the appropriate loan officer. I sat in to do some observation and noticed that she is asking the consumers if they know their credit score, and she also informs them of the bank’s minimum credit score requirement. In my observations, two times the consumer states, well I don’t have that so I guess I don’t qualify, thank you and then hung up. This was a red flag to me so I asked further questions — she states that she doesn’t discourage someone from applying if they have a low credit score, but that she thinks the consumers want to know our minimum score and that way they can make a decision on whether to move forward with an app.
I’m having heartburn with this one. Would this be considered an adverse action? We don’t techinically have an application because we don’t have the RESPA key factors, but I understand Reg B is different when it comes to an application.
Your feedback regarding this would be appreciated? Does anyone else have this issue and how was it addressed? Do you think this is an application that would require an adverse action notice?December 20, 2012 at 7:06 pm #3196JGo9Participant
I don’t think you can go wrong with giving an AAN on these types of issues. I personally would be pushing for one to be safe. Without I think you may have some serious Fair Lending issues on your hands, especially if the callers fall into one of the protected classes of borrowers.December 21, 2012 at 3:01 pm #3193dmurrayParticipant
I agree w/ JGo9
I think you could get yourself into a serious UDAP situation here. I would discourage her from any discussions with the borrowers about their credit score, especially inquiring if they already know their score. Sounds like you’re just asking for trouble.
She may believe she’s trying to “help them out” but in essence she could be steering potential borrowers away. Especially when it comes to the protected classes.
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