What if we have an emailed/mail/phone application, the application was not reviewed by underwriting (within 30 days) and there was no additional communications from the applicant. Can this be withdrawn under HMDA?

No, only the applicant can (expressly) withdraw an application. Did anyone review the application? If not, why not?

No one reviewed, unsure of why not? But isn't there another reason you can withdrawn a file without it being expressly withdrawn by the applicant. What if their is not more communication from the applicant?

Are you require to sent a notice out to the applicant before you can withdrawn the file for no response?

Are you require to sent a notice out to the applicant before you can withdrawn the file for no response?

You cannot withdraw an application. Only the applicant can withdraw an application.

You can send them a notice of incompleteness, or you can deny the application for incompleteness. You have a violation here, there is no getting around that, as you have already missed your Reg B timelines for action on your part.

Lisa, going back about 50 years ago to when ECOA came into being, in some cases, lenders did not want to make a loan to certain people, so what they did was ignore the application, put it in a drawer and forget about it. After a few months, the person would go elsewhere. That's why ECOA (at that time 12 USC 202.9 - notification requirements) came into being. The creditor cannot sit on an application, but notify the applicant of the actions taken within 30 days of a completed application. Some parts of the reg are below

In defining an application, you need to read "completed application"
6. Completed application—diligence requirement. The regulation defines a completed application in terms that give a creditor the latitude to establish its own information requirements. Nevertheless, the creditor must act with reasonable diligence to collect information needed to complete the application. For example, the creditor should request information from third parties, such as a credit report, promptly after receiving the application. If additional information is needed from the applicant, such as an address or a telephone number to verify employment, the creditor should contact the applicant promptly. (But see comment 9(a)(1)–3, which discusses the creditor's option to deny an application on the basis of incompleteness.)

and the comment quoted above
"3. Incomplete application—denial for incompleteness. When an application is incomplete regarding information that the applicant can provide and the creditor lacks sufficient data for a credit decision, the creditor may deny the application giving as the reason for denial that the application is incomplete. The creditor has the option, alternatively, of providing a notice of incompleteness under §1002.9(c).

So if we have a true application we need to make a credit decision within 30 days, that I understand. And an application can not sit on our system without review within those 30 days.

So at this point we don't have all the information needed we would sent out a incomplete letter, if no response within 30 days then would report as incomplete application under HMDA. This is correct? Do we need to obtain a copy of this letter?

And only if the applicant wtihdrawn the application, can it be coded as withdrawn on the HMDA LAR, correct?

if no response within 30 days then would report as incomplete application under HMDA.

You would either report as denied for an incomplete application or closed for incompleteness. I would think you would want a copy of the NOI as documentation for your decision.

And only if the applicant wtihdrawn the application, can it be coded as withdrawn on the HMDA LAR, correct?

Correct.

So at this point we don't have all the information needed we would sent out a incomplete letter, if no response within 30 days then would report as incomplete application under HMDA. This is correct? Do we need to obtain a copy of this letter?

Partially correct - after 30 days the creditor would send a notice of incompleteness to the applicant, giving them XX days to provide the information. The bank can determine the timeframe to hear back from the customer - many banks use 15 days to respond, then close out the file.
This would mean 15 days for the bank's agreeing to follow-up following the initial 30 days where the applicant did not provide sufficient information to make the decision. (total 45 days from application to action)

The Notice of Incompleteness can be sent anytime during the application process. The FI does not have to wait 30 days from receipt of the application to do so but they do need to either send the NOI or a denial for an incomplete application within 30 days of making the decision they have an incomplete application.

On the advice of our examiners, we include a drop dead date in our Loan Estimate letter to the applicant that outlines what documentation we need to process their application. It simply states, if we do not receive this information by __date__, we will close the file for incompleteness.

Lisa,
There are good flowcharts available for the Reg B process. You can find with a Google search.

Within 30 days of receiving an incomplete application, the bank must either deny the application for incompleteness (not very customer friendly) or send a Notice of Incomplete Application. As Dan mentioned, you don't need to wait 30 days to send the NOIA. Many of the banks I have worked for had a procedure that reduced this time period to get things moving.

Note there are two "30 day rules." This one, and the rule that says you must make a credit decision within 30 days of receiving a complete application.