Question:
This is a HMDA question. Borrower was scheduled for closing, but because a home inspection that the borrower ordered did not go as they planned, the borrower ended up cancelling closing. The bank did not require this inspection and all underwriting conditions had otherwise been met. In looking at the HMDA Action Taken guidance, which do you think we should report in this situation?
Answer:
It appears that this situation should be reported as Approved but not Accepted based on what you describe, and you can find this reflected in the commentary here:
If all the conditions (underwriting, creditworthiness, or customary commitment or closing conditions) are satisfied and the institution agrees to extend credit but the covered loan is not originated, the institution reports the action taken as application approved but not accepted.
https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/4/#4-a-8-i-Interp-13-i
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