[Gholloway]

We have a loan application where the initial loan amount request was $120,000. During the review process the customer requested that the loan amount be increased to $150,000. The loan was in the process of being underwritten for the new loan amount $150,000 – when the applicant ceased communication with the bank, so the file was closed for incompleteness.

What loan should be reported, the original $120,000 or the modified amount of $150,000?

Thank you

[rcooper]

This specific scenario isn’t addressed in the regulation or commentary. However, based on comment 10034(a)(7)-3 states:
“Covered loan amount—preapproval request denied, application denied, closed for incompleteness or withdrawn. For a preapproval request that was denied, and for an application that was denied, closed for incompleteness, or withdrawn, a financial institution reports the amount for which the applicant applied.

Its seems as though the applicant requested/applied for $150,000 and that is the amount you were using for underwriting. I think that is what you would report.

[jholzknecht]

I agree fully with Robin’s answer, but I have a question. Was the $150,000 loan amount documented? When the borrower requested the increased amount, did you receive an updated application? Did the officer place a memorandum in the file explaining the increased amount? The standard notice of incompleteness does not include the amount of the application, but I have seen versions of the form that do include that information. Did the notice of incompleteness include the $150,000 application amount?

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