EstatePass

SAFE MLO test · Timelines · Episode 3

After the Application

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Chapters

  1. 0:00The clock
  2. 0:1830 days
  3. 1:01The letter
  4. 1:39Credit report
  5. 1:59HMDA
  6. 2:18Recap

In short

Under ECOA the lender must tell the applicant its decision within 30 days of a completed application, and an incomplete one gets a decision or a notice of what is missing in the same 30 days. A denial gives the specific reasons, or the right to ask for them within 60 days, and always carries the ECOA notice. If a credit report was used, FCRA adds the bureau's details, a free report within 60 days and the score. HMDA data is recorded within 30 days after the quarter and submitted by March 1.

  • 30 days from a completed application; 90 days after a counteroffer the applicant ignores.
  • Every denial carries the ECOA anti-discrimination notice, however good the reasons.
  • Keep adverse action records 25 months.
  • HMDA: record within 30 days after the quarter, submit by March 1, keep three years.

Transcript

0:00The clock

Every completed application is owed an answer, and the law sets the clock. Here are the deadlines after the application: ECOA, the credit report rules, and HMDA.

0:1830 days

Under ECOA, the lender has 30 days from a completed application to tell the applicant what it decided. Approved, a counteroffer, or adverse action. Counted from the application, not from the decision. An incomplete application gets the same 30 days: a decision, or a notice saying what is missing. If the applicant ignores a counteroffer, the adverse action notice is due within 90 days. The appraisal has its own clock. On a first-lien home loan, tell the applicant within three business days that they will get a copy. Then deliver it promptly, or three business days before closing, whichever comes first.

1:01The letter

Now the denial letter itself. It gives the specific reasons, or tells the applicant they can ask for them within 60 days. If they ask, the lender has 30 days to answer. Pause. This letter has the reasons and a contact name. What is it missing? The ECOA notice: the statement that federal law prohibits credit discrimination. Without it, the letter is incomplete, however good the reasons are. And the lender keeps the file for 25 months.

1:39Credit report

If a credit report played a part, the credit reporting rules add more. Name the credit bureau, and say that the bureau did not make the decision. Tell the applicant they can get a free copy of the report within 60 days, and dispute anything wrong. And if a credit score was used, disclose the score.

1:59HMDA

Last, HMDA. Every covered application goes on the lender's register, approved or not. Record it within 30 days after the end of the quarter in which the lender took final action. Submit the year's register by March 1, and keep it for three years.

2:18Recap

Thirty days to answer, sixty to ask why, twenty-five months to keep the file. Next: six consumer laws, one table. Subscribe so you catch it.

Sources

  • 12 CFR 1002.9 and 1002.12
  • Fair Credit Reporting Act § 615(a)
  • 12 CFR 1003.4(f) and 1003.5(a)

Independent study material. EstatePass is not affiliated with NMLS or CSBS, and nothing here is legal advice. Any lenders and borrowers in our episodes are fictional.