[kmullarkey]

If we made a credit decision on a loan but the decision was based on obtaining an appraisal or obtaining the income documents & the customer withdrew prior to getting the appraisal and sending in the income documents, would we report NA on the LAR for DTI/LTV or should we report the actual DTI/LTV based on the original credit decision?

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[jholzknecht]

Comment 4(a)(23) – 3 states, “If a file was closed for incompleteness, or if an application was withdrawn before a credit decision was made, a financial institution reports that the requirement is not applicable, even if the financial institution had calculated the ratio of the applicant’s total monthly debt to total monthly income.”

This is a close call. According to Comment 4(a)(8)(i) – 13 if you issued an approval conditioned solely on customary commitment or closing conditions and the applicant expressly withdraws before satisfying all underwriting or creditworthiness conditions and before you deny the application or closes the file for incompleteness, then the application is reported as withdrawn. If the facts change even a little bit then the answer changes as well.

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