[KRT]

I am reviewing a prequalification application that was considered closed for incompleteness. However, no adverse action or notice of incompleteness was sent to the applicant. It is not clear what documentation was requested from the borrower. Is this a violation of Reg. B?

Topic

[kowsley]

According the Regulation B, a prequalification becomes an application when the lender evaluates information about the consumer, decides to decline the request, and then communicates that decision to the customer. If a decision was not made then the prequalification hasn’t become an application and there is no violation of Regulation B.

[Author]

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