We suppress the Address and Property Value on our online applications. Even though we consider the 6 TRID items as HMDA reportable and a completed application, we obtain enough information to complete the LAR other than the Address and Property Value. If we Deny, WD, or FCI before obtaining the address and property value, would we still report on the LAR even though we don't consider this as a completed application? Another thing to add is that our online applications are considered prequalification's which would technically make the loans not reportable. I have seen commentary that states we should report on the LAR if we have enough information to complete even though we don't consider a complete application. I have also seen where we do not have to report if we considered an incomplete application. Can someone give me some answers as to what you may have done or seen?

If you had enough information to deny, how did you not have an application?

Your institution needs to define its own application process.

What is an inquiry/prequalification? These are not reportable. If you deny them, they still aren't reportable applications under Reg C, but they do become applications under reg B and require AAN.

What is an application? "Application means an oral or written request for a covered loan that is made in accordance with procedures used by a financial institution for the type of credit requested." That is for you to figure out. Many institutions use the TRID 6 pieces, but you can't treat them like a request for credit before this point if you want to use this definition. If you are sending NOIs and closing files as incomplete without an address, then you're going to be hard pressed arguing they aren't applications seeing as those are steps taken with an application.

What is a completed application? This is irrelevant for whether an application is reportable under Reg C, but you should know this as well for Reg B purposes.

Where have you seen that? Neither of those statements seem accurate or really make sense. If it's an application, it's reportable whether incomplete or not. Question is whether it's a prequal/inquiry or an application.

I'm in the camp that says if a credit decision was made and you had enough to do that, you had an application. It may not be what you define as a typical application, but the way various regulations are applied tells me you had one.

For HMDA, I would disagree. Prequalifications are denied all the time and are specifically excluded from HMDA reporting. Under Reg B, yes. I would not report for HMDA though. You'll be comparing apples and oranges with peer data if you include prequals and your peers don't.

That is valid. The request was not a prequal however because the bank avoided getting the address in an effort to avoid reporting HMDA. That sounds like a different violation if that is what's really happening. It could be fair lending just to distort HMDA and fair lending controls.

This is where I was headed that Prequals are not HMDA reportable, but YES Reg B reportable.

Andy Z we are not avoiding getting the address in an effort to avoid reporting HMDA. I am on the fence with not reporting because the Address can be NA on the LAR and we have enough information to complete the rest of the LAR. It is our process that our internet applications are prequalification's until we receive a contract. If we do not receive the contract then we are considering them Prequals and not reportable in accordance with Reg. However if we do not give a prequalification letter or there is not one in the file, then I have an issue stating that all TBD's from our online platform are prequals and have stated as much to Sr. Mngt. I have questioned as to whether or not we are in violation from suppressing the address and property value.

"We suppress the Address and Property Value on our online applications." That sounds incriminating to me. Perhaps its just a bad choice of words or I misunderstood. But if I were auditing I would want to review these non-apps for common traits.

1003.2

2. Prequalification. A prequalification request is a request by a prospective loan applicant (other than a request for preapproval) for a preliminary determination on whether the prospective loan applicant would likely qualify for credit under an institution's standards, or for a determination on the amount of credit for which the prospective applicant would likely qualify. Some institutions evaluate prequalification requests through a procedure that is separate from the institution's normal loan application process; others use the same process. In either case, Regulation C does not require an institution to report prequalification requests on the loan/application register, even though these requests may constitute applications under Regulation B for purposes of adverse action notices.


These addresses are purposely being suppressed to avoid TRID disclosures. These are not HMDA pre-qualification requests.

HMDA reporting is not based on rather the application is considered complete. It is based on the disposition of the application regardless if complete or incomplete.

The poster states they obtain enough information to make a credit decision therefore I'm not sure how they can support not reporting these online applications on the basis that they are purposely not collecting the address to avoid TRID disclosures.

I see all kinds of TRID and HMDA red lights going off on this. My examiners would have a field day.

I think there are some really big issues with this as it flies in the face of the shopping principle that is the basis of TRID and readily making an LE available to the consumers. Structuring an application in order to try to gather some additional information is allowed. Purposely not allowing a consumer to enter one of the six elements to get the bank out of issuing an LE is not. As far as the sales contract is concerned, a review of the original preamble is in order:

The Bureau is concerned that some creditors may use the purchase and sale contract as verification documentation to support information that it has asked the consumer to provide in connection with the consumer’s application, such as the sale price or the property address, before the creditor issues the Loan Estimate, although as noted in the section-by-section analysis of § 1026.2(a)(3), the practice may be permissible under current Regulation X for purposes of the RESPA GFE in limited cases. Final comment 19(e)(2)(iii)-1 explains that a creditor is not permitted to require, before providing the disclosures required by § 1026.19(e)(1)(i), that the consumer submit documentation to verify the information provided by the consumer. The Bureau is adopting § 1026.19(e)(2)(iii) based on the same intent on which HUD based § 1024.7(a)(5), which is to prevent overly burdensome documentation demands on mortgage applicants, and to facilitate shopping by the consumer.