A credit report is run on a mortgage application. The loan is later denied due to collateral (or any other non-credit reason). Should Section A on the Adverse Action letter be checkmarked "Yes" that the decision was based in whole or in part on information obtained in the credit report? In addition, should the credit agency and score be included in the adverse action?

No - not on the AAN, but that information should have already been presented to the borrower on the Risk Based Pricing Exception Notice or the Notice to Home Loan Applicant under the FCRA 609(g).

Do you know where I would go to prove that point? That is what I was taught (to not mark it) but I am getting push back.

How about from the commentary in Appendix C of Regulation B?

2. Form C–1 contains the Fair Credit Reporting Act disclosure as required by sections 615(a) and (b) of that act. Forms C–2 through C–5 contain only the section 615(a) disclosure (that a creditor obtained information from a consumer reporting agency that was considered in the credit decision). A creditor must provide the section 615(a) disclosure when adverse action is taken against a consumer based on information from a consumer reporting agency.

What does denying a loan based on the collateral have to do with the credit report? It is a common violation cited by the regulators.

Thank you for your help!