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Timeliness: Once you have enough information on a file to know it is a denial or withdrawal, the file must be referred to [email protected] within 30 days to ensure compliance with Reg B – the Equal Credit Opportunities Act.
In addition, TRID rules state that a lender must send out the Loan Estimate (with our Initial Disclosures package) within 3 business days of receiving a complete application, unless the file is denied by the lender or expressly withdrawn by the borrower during those first 3 business days. Therefore, on files with addresses, if you are not planning on sending initial disclosures because a file is to be denied, or because the borrower is no longer interested, you must refer the file to [email protected] within 3 business days of the application date.
If the Denied/Withdrawn loan has not been to Underwriting:
1. The 1003 is to be completed in full. Borrowers’ names, SS number, current address, and subject property city/state/zip or TBD address (if one is not available).
2. Complete the Loan Summary information at the bottom of the Borrower Summary Page. Enter the loan terms to the best of your knowledge, including product type.
3. Fill in the income on every borrower.
4. Fill in your declarations on every borrower.
5. Complete the Government monitoring section for each borrower. Double check that how the app was taken is completed for all. Remember, if the app was taken face-to-face, you must make a visual determination if they choose not to respond.
6. Upload to Imageflow under Loan Officer Denial Information any information that clarifies why the loan is being denied or withdrawn. Examples of documentation supporting denial may include AUS findings, ratio calculations, LOX, etc. There is no need to upload the credit report into Imageflow at this point if it hasn’t already been uploaded.
7. Email [email protected] with the reason for denial or withdrawal to request the completion of the denial or withdrawal.
If the loan meets our matrix/requirements and is considered a prequal (TBD address on a purchase) but the borrower will not be proceeding –
upload the pre-qual letter, and have “PR” added to the front of the loan number, and archive the file.
If the loan is in Underwriting and the borrower withdraws or the file must be denied:
1. Upload the documentation that led to the decision to deny or withdraw.
2. Upload a note to the UW identifying the reasons for the decision.
3. Final the file or direct your processor to final the file back to underwriting.
4. The underwriter will finish the process of denying or withdrawing the file.