Applicant approved subject to appraisal, title search and homeowners insurance (appraisal is not ordered until appraisal fee is received from the applicant). Lender tried to reach applicant by phone over a period of two weeks with no response. Would this be a denial or a withdrawal?

If a denial, should the reason be value of collateral?

Since you have a conditional approval and the appraisal is an underwriting/creditworthiness condition, this would be a denial.

13. Action taken—conditional approvals. If an institution issues an approval other than a commitment pursuant to a preapproval program as defined under § 1003.2(b)(2), and that approval is subject to the applicant meeting certain conditions, the institution reports the action taken as provided below dependent on whether the conditions are solely customary commitment or closing conditions or if the conditions include any underwriting or creditworthiness conditions.

i. Action taken examples. If the approval is conditioned on satisfying underwriting or creditworthiness conditions and they are not met, the institution reports the action taken as a denial. If, however, the conditions involve submitting additional information about underwriting or creditworthiness that the institution needs to make the credit decision, and the institution has sent a written notice of incompleteness under Regulation B, 12 CFR 1002.9(c)(2), and the applicant did not respond within the period of time specified in the notice, the institution reports the action taken as file closed for incompleteness. See comment 4(a)(8)(i)-6.

I'm assuming you sent them something when they didn't respond. Was it an AAN or an NOI? That will determine the Action Taken. If you didn't send them anything, then your issue isn't HMDA. HMDA is just a symptom.

In addition to Adam's "conditional approval" comment, your applicant has not expressed any intent to withdraw the app, they just haven't responded. Lenders should be hesitant to "withdraw" any application. That could lead to fair lending issues and at least questions. 4(a)(8)(i)-5 even uses the term "expressly withdrawn."

As a piggy back, if the applicant expressly withdraws a conditionally approved (underwriting) application, under 2018 HMDA, it is reported as a withdrawal. Two questions: 1. does the conditional approval have to be written to fall into this category of withdrawal, and 2. is an AAN needed for an incomplete application?

Thank you.