For HMDA purposes, how do you report conditional approvals?
If the bank sent a notice of incompleteness under Reg. B, and the applicant did respond but did not meet the conditions for approval, you would use Code 3—Application denied.
If the bank sent a notice of incompleteness and the applicant just did not respond within the required time period, you would use Code 5—File closed for incompleteness.
If the bank did not send a notice of incompleteness and the applicant did not meet the underwriting conditions, you would use Code 3—Application denied.
Finally, if the applicant actually withdrew the application before a credit decision was made, then you would use Code 4—Application withdrawn
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