Counter-Offer's
Ok ladies and gentelman it is opinion time. [8] Lets say a borrower wants a $100,000 loan. We counter at $90,000, and the borrower accepts. 10 days after the borrower accepts the counter-offer, which was approved, they decide to cancel the file. Do we have an "approved not accepted" loan or a "denial?"
Paragraph 4(a)(8) Type of action taken and date. 1. Action taken—counteroffers. If an institution makes a counteroffer to lend on terms different from the applicant's initial request (for example, for a shorter loan maturity or in a different amount) and the applicant does not accept the counteroffer or fails to respond, the institution reports the action taken as a denial on the original terms requested by the applicant. In your hypothetical case, I believe you can choose either Action code. But, as with all HMDA related issues if you choose a certain direction on a subject, you should remain consistent. So if you choose to report one of those as an Approved but not Accepted, you must report all similar situations the same. That is my opinion. jaw
I have to agree with John as to the regulation and being consistent. Based on this I have always taken the position that the loan did not close, and as such the borrower rejected the counteroffer. Subsequently, I would have reported the loan as a denial.