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How do you handle a situation where an approval letter has been issued by underwriting, but the pre-funding QC audit discovers something that would cause that approval to change to a denial?

April 26, 2017Approval audit discovers issued letter pre-funding QC Underwriting

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How do you handle a situation where an approval letter has been issued by underwriting, but the pre-funding QC audit discovers something that would cause that approval to change to a denial?

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• Answer – A finding such as this is why pre-funding is so important. If you find something that would change the approval to a denial, then do not fund the loan. I would have a discussion with the borrower as to why they do not qualify and issue the required adverse action notice in writing.