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If a lender denies a mortgage loan, what document informs the applicant of the denial?

1 Answer

4 votes

Final answer:

The lender provides an adverse action notice to inform the applicant of the denial and the reason(s) for it.

Step-by-step explanation:

When a lender denies a mortgage loan, they are required to provide the applicant with a document called an adverse action notice. This notice informs the applicant of the denial and provides the reason(s) for the denial. It is a legal requirement under the Equal Credit Opportunity Act (ECOA) and the Fair Credit Reporting Act (FCRA) to provide the adverse action notice.

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