Defining Applications for Online Mortgage Lending

This article reviews  the definition of “application” across Regulations B, C and Z, and how those definitions can inform treatment of online mortgage loan applications.

When it comes to regulatory considerations surrounding mortgage loans, a lot depends on the application. Receiving an application can trigger disclosure and reporting obligations under multiple regulatory frameworks — so it is important to understand what meets the definition of an application, when a credit union has received an application, and whether or not the application is complete. When an application is completed at the credit union or tendered in person, these answers are fairly straightforward. However, this is more and more rarely the case. Increasingly, mortgage applications come through online lending platforms and channels where these issues can get muddied. A careful review of the regulatory definitions of application and how they might apply to an online process can clarify these questions.