Incomplete App & Reg B Adverse Action Notices

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Question:

I was asked by a peer about "mortgage bot" application entered on the Internet that were not submitted and not complete to meet the 5 criteria to be a mortgage application (SS#, name, address, loan number and product). I was asked if they require a Reg B adverse action notice. I view them as an incomplete application which technically wasn't even submitted and not Reg B compliant. Am I right these are not applications and do not fall under the Reg B requirement of adverse action notices? They do not fall under HMDA requirements and I do not believe they should be reg B required either. If I didn't have a name or an address I couldn't mail them out even if I wanted to.

Answer:

An incomplete application from a RESPA standpoint would still be an application under Reg. B. You need to review 12 CFR 1002.9 for the handling of incomplete applications. It would either trigger a notice of incompleteness or an adverse action notice denying the loan for an incomplete application.

Any internet mortgage application system that allows applications to be submitted without an applicant name and address should really be addressed. They should not be able to even submit the application without at least those fields completed.

First published on BankersOnline.com 5/28/12