[kmeade]

If a father applies for a loan and he tells you the loan will be in his name and his daughter’s name and the daughter will come to the bank two days later (because of her job). The fathers application is dated two days before the application the daughter signs, but both express they want the loan together. Is this considered “Joint Intent”?

Topic

[rcooper]

Kansas City Federal Reserve, January 2018, https://www.kansascityfed.org/en/banking/fedconnections/archive/ensuring%20compliance%20witih%20reg%20b%201-3-18

Bankers have some options on how to determine an individual’s intent to be a joint applicant. Remember that the determination must be made contemporaneously with the application for credit and properly documented in the credit file. This can be accomplished by requiring the use of written applications for all credit transactions, with a separate disclosure on which the applicants overtly affirm their intention to apply for joint credit. Refer to the sample form in the Appendix to Regulation B. Another option is to provide applicants, at the time of the application, with a joint intent disclosure on which they may indicate their intention to apply for joint credit. Finally, absent written applications or applicant acknowledgement on other joint intent disclosures, the loan officer may simply ask the applicants about their intentions and document it via a note to the credit file. By dating the loan officer’s note, banks may be able to document that the applicants’ intentions were determined contemporaneously with the application for the credit.

[kmeade]

So, if only one borrower is present for the initial application and they tell the lender someone else is applying with them, the lender can mark on the application that the second borrower intents to apply jointly with the first borrower, based on the information given by the first borrower?

[rcooper]

What you’ve described is a practice that seems to have been historically acceptable. You could also call, email, fax, etc. the applicant that isn’t present to obtain verification.

1002.7(d) says:
…The method used to establish intent must be distinct from the means used by individuals to affirm the accuracy of information. For example, signatures on a joint financial statement affirming the veracity of information are not sufficient to establish intent to apply for joint credit.

Based on the commentary and info above from Kansas City Fed, determine what method you are comfortable using to establish joint intent. If the applicant isn’t present, my personal preference, in order to avoid any issues of the joint applicant not knowing they were being included on the app, is to confirm with each applicant rather than allow one applicant to confirm for both.

[kmeade]

If we have the second applicant initial for joint intent, when they sign their application, even though it is a few days later than the first applicant we should be compliant?

[rcooper]

Intent to apply jointly needs to be noted at the time of application. It seems you’ll have an application before the co- applicant comes back in to sign the app. I wouldn’t wait for the application to be signed. I would ask the LO to obtain confirmation and document it at application.

[Author]

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