We have applicants that apply online and input a request of an initial loan amount, after discussions, the borrowers loan amount may change.

If the loan is denied, wouldn't the last loan amount discussed be recorded on the HMDA Lar? Under 1003.4(a)(7) the loan amount should be the amount for which the applicant applied. If the loan amount changed, wouldn't that be the amount the applicant applied for? The change is discussed before a credit decision is made.

The adverse action notice is sent to the borrower with the loan amount that was last discussed.

I am not sure it is that cut and dried. It really would depend on how the loan amount was adjusted and why. Was it totally the borrower's idea or was it based on something that the bank may have said to them? Let say I found a house for $100,000 so I ask for a loan for $95,000. The loan officer gets the application and tells the applicant that your product offering requires 10% down, so I say, OK, then we will apply for $90,000. That is a counteroffer and if the counteroffer is denied, then you have to go back to the original loan amount for reporting.

If the borrower is in discussion with the Lender and decided they wanted a certain product, basically they did not know the differences when applying online, then would we report the new loan amount requested? That would not be a counteroffer, correct? If the loan amount is changed and the loan is denied, the Lenders complete the Adverse Action Notice with the new loan amount. If this is the last disclosure/notice given to the borrower wouldn't this be the loan amount recorded on the LAR?

How is that any different than what I said. Were you not able to make the loan for the amount originally requested?

Randy,
In conversation with Lenders, the discussions with borrowers are to confirm the loan amount applied for and ask if this is what they really meant to apply for. One borrower input $40 by mistake, so we just confirm and if the borrower says yes or no or wants to increase/decrease based on product for example. To me that is a change in application. We do not send out counteroffer letters or notices, not to say that we don't have the occasional true counteroffer! (that's another discussion).