There Is Always A Need to Understand The Basics
As a youth growing up, my dad, a man of few words, always stressed to me understanding the basics. Right off in life, one of the basics you understood was who was in-charge, and that was the adult, thus the first basic you learned in life, you learned it the easy way or the more painful way (literally). The next basic you understood involved what it took to accomplish the desired objective. You could not expect to learn your studies if you did not spend time on them, thus, before play came homework. You could not expect to understand sports without knowing the basics, thus, before engaging in the sport, the objective to conqueror was throwing, kicking or catching the ball. Before learning how to race a bike, the basic to learn was how to balance on the bike. Before learning how to drive, the basic to learn was how to care for the car.
Constantly I get certain questions as related to applications, especially within the context of Non Closed TRID Closed-End Real Estate Secured loans. Generally the questions involve such loans declines/withdrawn within three days. They are also usually asked within the context of HMDA.
With such questions, it all comes down to understanding the basics. Herein I will cover a few of these basics related to some of the most common scenarios I hear as a brief refresher.
INCOMPLETENESS. This refers to underwriting or creditworthiness application conditions related to the applicant, solely, and not the property. This does not apply to prequalifications. The file is closed for incompleteness after a Written Notice of Incompleteness has been sent to the applicant.
WITHDRAWN. This refers to an action by the potential borrower before a credit decision has been made. Never hearing back from an applicant is NOT a withdrawal. A withdrawal means the applicant communicated with the lender in writing, or orally.
APPROVED, NOT ACCEPTED. You have an approved applicant who declines the transaction or property related issues/problems prevented closing the loan.
THREE DAY DENIAL DOCUMENTATION DOCUMENTS TO NOT FORGET!!! AMONG THOSE COULD INCLUDE: Joint Intent (if more than one applicant), Credit Score/Notice to Home Loan Applicant, Appraisal Disclosure, Adverse Action Notice (if declined).
Hopefully this brief overview of some of the basics helps. Refreshers are always good. Hey, when needed, remember that Notice of Incompleteness, folks!