October 5, 2023 at 9:54 am EDT #342434AuddyDParticipant
We frequently have applications that are conditionally approved subject to appraisal. My question is what if the the applicant doesn’t cooperate and and allow an appraiser onsite or refuses in some way (can we send a NOI)?
If the approval is conditioned on satisfying underwriting or creditworthiness conditions and they are not met, the institution reports the action taken as a denial. Conditions: 1003.4(a)(8)(i) #13(iii)
But in this case, prior to denial, would a Notice of Incompleteness be appropriate because the appraisal has not been met?
The confusion here is that you have an idea of property upfront thus, being able to conditionally approved subject to an appraisal.October 9, 2023 at 3:35 pm EDT #342453Kimberly Boatwright, CAMS, CRCMKeymaster
A conditional approval means that a mortgage underwriter is mostly satisfied with the mortgage application. The lender is willing to approve the mortgage so long the pending conditions are met. However, it is not a guarantee the application will be approved. Instead, it means the lender is willing to loan a specific amount of money based on certain criteria. In your example, it would be an denial and not a NOI. The application approval requires certain actions to be taken, for example an appraisal. Since this requirement was not allowed or completed then the loan could never be fully approved, so it would be a denial. Other conditional approval requirements like changes in a financial situation, government regulations, property condition could all lead to a declined final loan.
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