[tressa]

REG B states that a creditor shall notify an applicant of action taken within 90 days after notifying the applicant of a counteroffer if the applicant does not expressly accept or use the credit offered.

Let’s say an applicant applies for $250,000 but qualifies for $175,000 due to exceeding the bank’s debt to income ratio guidelines. The borrower verbally accepts the $175,000, an appraisal is ordered but then decides he does not want to go through with the loan because of the interest rate.

Would you consider this a withdrawal because the applicant expressly accepted the lower loan amount, or should an Adverse Action Notice be provided to the applicant based on the original loan amount requested?

[Kimberly Boatwright, CAMS, CRCM]

Do you have written proof of the verbal acceptance of the lower loan amount? If you do not, I would err on the side of caution and send him the AA notice. But if you have documentation of the acceptance then I would consider it a withdrawal for purpose of Reg B.

[Author]

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