[AuddyD]

I’m looking for some clarification on counter-offers. It is my understanding that a counter-offer occurs any time a Bank offers an applicant something different from what the they originally requested. We had a question come up if we offered a higher loan amount than what was requested, if that is still a counter offer.

For example, if a client asks for $100,000 which is 90% of the estimated value of the home, and when the appraisal comes in higher than we expected, we offer $125,000 (for LTV reasons) (90% of the new value). The client wants the $125,000. Is that still a counter offer?

[Kimberly Boatwright, CAMS, CRCM]

Classification is not dependent on the amount being lower than requested by the borrower. Anytime you would change the request up or down it would be considered a counteroffer because it is not what they requested at the time of application.

specifically HMDA Comments for 1003.4 Paragraph 4(a)(6) 9. Action taken – Counteroffers states “If a financial institution makes a counteroffer to lend on terms different from the applicant’s initial request (for example, for a shorter loan maturity, with a different interest rate, or in a different amount)”

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