QUESTION
We are a mortgage broker. Recently, we submitted an
application to two separate lenders. One of the lenders originated the loan,
but the other one did not send out the notice of action taken to our borrower. Isn’t
the other lender required to send that notice?
ANSWER
When an application is made on behalf of an applicant to
more than one creditor, such as when a mortgage broker submits an application
to more than one creditor, if the applicant expressly accepts or uses credit
offered by one of the creditors, notification of action taken by any of the
other creditors is not required.
If no credit is offered or if the applicant does not
expressly accept or use any credit offered, each creditor taking adverse action
must comply with the ECOA notification requirements, directly or through a
third party, such as a mortgage broker.
Any notice given by a third party must disclose the identity
of each creditor on whose behalf the notice is given. [12 CFR § 202.9(g)]
Jonathan Foxx
President & Managing Director
Lenders Compliance Group
