[Mary Beth Devillier]

Okay, after reviewing this file from the Officer, this applicant is a new customer to the bank. He recently opened a checking account in early August and then applied for an unsecured debt consolidation loan. So, the accounts reported on his credit report were several education loans and credit cards. The oldest account starting in 2022 and most recent account in 2025. He qualified with his DTI, no delinquencies but a low credit score according to our guide lines. Due to his low credit score, he is not a qualified applicant. I was thinking that since we have a low credit score policy that this would be the only way to approve the loan by those guidelines. The struggle is handling the denied original request by specific reason that is acceptable (according to the regulators). Am I wrong to for what we are willing to counteroffer? Or for fair lending purposes, like you said above, counter for a qualified co-applicant since he needed more money than we could give offer with our low credit score policy?

[Mary Beth Devillier]

I hate to keep harping on this situation, but, after speaking with the Officer, this customer utilizes a line of credit (secured by a 1-4 dwelling) to purchase and/or renovate investment 1-4 family dwellings. She then will mortgage the new property to reimburse (pay down the line of credit) as she completes them. In some cases, she might overlap her timing, meaning, she will pull money on line for new project and we are in the middle of funding a past purchase so the line doesn’t go to zero at this time, but the debt used for the particular property is satisfied. Again, should be reported Refinancing each time of new loan?

[Mary Beth Devillier]

Loan #1 – We put a 2nd lien on their primary dwelling at the time to purchase a new dwelling. We did classify as a bridge loan. This loan was to be paid off by the sell of their home.

Loan #2 – We had to refinance Loan #1 as it matured and the home did not sell. It is still on the market to sell. They have moved into their new home and the officer is classifying as secondary residence
on the home with the mortgage. This loan will not be sold in the secondary market, will remain on our books until the sell. These two houses are within the same subdivision, so to me this is investment property for consumer purpose.

[Mary Beth Devillier]

Correct this is permanent financing with completion of construction. Thanks!

[Mary Beth Devillier]

Good Morning, I just want to make sure that the above scenario is considered a refinance even though the previous loan (line of credit) is not being closed but is being paid to zero.

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