Question

Which of the following statements is false?

A. An adverse action notice is required for a loan modification request that is denied.
B. An adverse action notice must be given to consumers in writing.
C. If an applicant does not respond to a counteroffer, you do not have to take any further action.
D. You can consider an application incomplete, if the applicant has not yet provided all of the information requested on the application that is within their control.

Answer 1

The false statement is that if an applicant does not respond to a counteroffer, no further action needs to be taken. This is incorrect as lenders should follow up or take appropriate action.

Step-by-step explanation:

The false statement among the options is C. If an applicant does not respond to a counteroffer, you do not have to take any further action.

When a loan modification request is denied, an adverse action notice is required. This notice informs the applicant of the reasons for the denial and any rights they have to appeal the decision. Adverse action notices must be given to consumers in writing for transparency and compliance with regulations.

Considering an application incomplete if the applicant has not provided all of the requested information within their control is a valid practice. This allows lenders to properly evaluate the application and make a decision. However, not taking any further action if an applicant does not respond to a counteroffer is false. In such a case, the lender should follow up with the applicant or take appropriate action according to their policies and regulations.