[kcco]

A loan request started as a purchase of 23+ acres of bare land (not HMDA). The bank did not like that request and countered. The VERBAL counteroffer was to refinance their 1st mortgage with another lender and consolidate some debt. Then follow with a second mtg for the land they initially wanted (this would bring down the DTI% to more acceptable terms). How do I report this for HMDA? The borrowers were verbally countered but did not get back with us, so they did not accept the terms. So, do I follow the initial application as assume this is not HMDA, or report this because of the counteroffer?

[rcooper]

In my opinion, you base the action on the original application. The counteroffer was not accepted so what you are left with was the original app. Although Reg C didn’t apply to the original app, I think Reg C commentary does support the general idea of looking to the original app when a counteroffer is not accepted (see paragraph 4(8)(a) discussing action taken).

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