Denied Loans Exempt from Early TILA?

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Question:

When a loan is declined within three days of application, the early RESPA disclosures are not required. Are the Reg Z early disclosures required? I can't seem to find anything in the regulation that would exempt denied loans from the early TILA.

Answer:

Answer by David Dickinson: If your application is dead, then disclosures are no longer triggered. There's nothing in the regulation about this because it is understood that there is nothing to disclose.

Answer:

Answer by Dan Persfull: An ETIL is only required on residential mortgage transactions subject to RESPA. If you deny the loan within three business days of the application, the loan request is no longer subject to RESPA and the ETIL would not be required.

First published on BankersOnline.com 6/30/08