08-27-2009, 03:17 AM
We basically have a situation where the lender denied the loan based on something that probably wasn't really available or accurate. They claim it was that information that resulted in the denial but won't put it in writing. That reasoning for denial falls within the narrow crack between federal and state reporting to the consumer meaning the reasoning allowed the lender to avoid mandatory reporting the reason for the denial to the consumer. Now, one would think that good business/lending/customer service practices would be such that the lender explains in writing the reasoning, but that is not the case. This probably happens because the lender knows they don't have too and they have gotten away with it for so long that it’s now a business practice.
So, what is it the client wants? If they want the lender to just put in writing the reason for denial, all the client has to do is file a complaint with the FTC under the FCRA. Yes, I know they didn't say the denial was because of the credit report, but since they didn't put the reason in writing, as far as the client is concern, it was the credit report that caused the denial. If they didn't do an appraisal and there is no legitimate reason to know rental numbers, about the only tangible thing the lender did have to base their decision on was the credit report. (The consumer is under no obligation to prove this, they only have to say the lender obtained the credit report, did not even do an appraisal, yet refused the loan, so it had to be based on the credit report.) The FTC will ask the lender why they refused the loan and not send the required denial letter due to actions based on the credit report. The lender will respond that it was not the credit report but (fill in blank) that resulted in the denial of the loan. Now you have a written document from the lender as to the reason for denial.
So, what is it the client wants? If they want the lender to just put in writing the reason for denial, all the client has to do is file a complaint with the FTC under the FCRA. Yes, I know they didn't say the denial was because of the credit report, but since they didn't put the reason in writing, as far as the client is concern, it was the credit report that caused the denial. If they didn't do an appraisal and there is no legitimate reason to know rental numbers, about the only tangible thing the lender did have to base their decision on was the credit report. (The consumer is under no obligation to prove this, they only have to say the lender obtained the credit report, did not even do an appraisal, yet refused the loan, so it had to be based on the credit report.) The FTC will ask the lender why they refused the loan and not send the required denial letter due to actions based on the credit report. The lender will respond that it was not the credit report but (fill in blank) that resulted in the denial of the loan. Now you have a written document from the lender as to the reason for denial.