"Notice of Incompleteness" for Credit Report

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Question:

Our loan officers pull clients credit reports and input the information in our LOS. Not all six items that make up an application for a home loan have been provided. My question is, do we still send out a "Notice of Incompleteness" to the client if the only thing that was received in the loan file was the credit report and the loan has been in our system for 30 days with the property marked, "TBD?" The way I read Reg B is that you only send out the NOI once it is considered an application. So if these are not considered an application but you obtained credit, would we not have to send some sort of documentation/NOI because the score is good enough to move forward?

Answer:

Don't confuse the Reg Z TRID definition of completed application with the Reg B definition of completed application. They are two (or potentially are) two different things. Under Reg B you are free to define (and in fact should define) what you consider to be a completed application. You should also specify, under Reg B, what processes an applicant can use to submit an application, which is simply defined as a written or verbal request for credit made in accordance with procedures established by the creditor. An application is simply your applicant saying "I want a loan" regardless of whether you have one piece of information, six pieces, or 100 pieces. Moving it from "application" to "completed application" (as defined by Reg B) is where the "Incomplete Application" notice comes into play.