Policy | C2C File Cancellation Policy

Updated May 2026

Withdrawn/Denied/Cancellation Policy

 Effective Date: May 7, 2026

Purpose 

This SOP establishes mandatory, uniform procedures for the cancellation of any mortgage loan application file processed through the ARIVE Loan Origination System (LOS). The policy ensures full compliance with the Equal Credit Opportunity Act (ECOA), Consumer Financial Protection Bureau (CFPB) rules, and TILA-RESPA Integrated Disclosure (TRID) rules while protecting the company, its employees, and applicants from regulatory violations. All file cancellations must be handled with absolute precision, proper documentation, and timely adverse action notifications.

Scope 

This SOP applies to every employee of the company, including loan officers, processors, compliance staff, and management. It covers all residential mortgage loan applications originated or brokered by the company, regardless of loan type, loan amount, or applicant status.

Responsibilities

• Loan Officers and Processors: Initiate cancellation, document all borrower contacts, enter data in ARIVE, and ensure the lender’s adverse action notice is obtained and uploaded.
• Management: Conduct periodic audits, enforce compliance, and impose disciplinary measures for violations.

Company Policy 

When an application is accepted, the company/lender shall provide all disclosures to the borrower as required by law, depending on the type of transaction and the applicable federal and state regulations.

If an application is received incomplete, the loan team shall advise the borrower of the deficiencies and request the missing documentation or clarifications within the next five business days. The LO will evaluate and/or pre-qualify on a complete application within 30 days of receipt.

When a mortgage applicant’s request cannot be granted or is withdrawn by the applicant, the lender will issue a Notice of Action Taken (“AAN”) within 30 days of the action taken.

Rejected Mortgage Applications will be processed according to ECOA rules, within rolling 30-day time windows, and in writing via a Notice of Action Taken (“NOAT”) or Adverse Action Notice (“AAN”) either denying or withdrawing the application. The Lender uses the procedures outlined in ECOA for completion of an Adverse Action Notice with enough specificity to be helpful to the consumer. The company/lender also provides credit scoring information as required by law.

Denied files MUST include the lender’s adverse action notice. 

Files withdrawn due to inactivity MUST contain detailed file notes demonstrating documented contact efforts (phone calls, emails, texts, certified mail, etc.) before any cancellation status is applied.

All actions are governed by ECOA (Regulation B), CFPB enforcement guidelines, and TRID disclosure timing requirements. Non-compliance is strictly prohibited.

Procedure:

How to Cancel a File in ARIVE LOS (video tutorial: How Do I Adverse a Loan? : ARIVE)

1. Determine and Document the Reason for Cancellation

• Denial by lender
  1. If a loan is denied by a Lender, the loan file MUST be denied in ARIVE, and a new loan starts if the loan will proceed with another Lender.
• Withdrawal by applicant (verbal or written)
• Inactivity (no response after documented contact attempts)

1. Record All Borrower Contact Efforts in ARIVE File Notes (required for every cancellation)

• Enter date, method of contact, person contacted, summary of conversation/outcome, and next steps.
• For inactivity withdrawals: Notes must explicitly state “File being withdrawn due to inactivity after documented unsuccessful contact efforts.”

1. Obtain and Attach Lender Documentation

• For any denial: Immediately obtain the lender’s official Adverse Action Notice (AAN). This document is mandatory and must be uploaded before proceeding.

Complete Adverse Information in ARIVE LOS (mandatory steps – no exceptions) 

1. Log into ARIVE LOS with your individual credentials. 
2. Open the specific loan file and navigate to Loan > Status > Decision (or Conditions > Adverse Action tab). 
3. Change the loan status to the appropriate cancellation type: “Denied,” “Withdrawn – Applicant,” or “Withdrawn – Inactivity.” 
4. In the Adverse Action section, select “Issue Adverse Action Notice.” 
5. Enter the exact reason(s) for the action using clear, specific language that matches the lender’s notice (e.g., “Insufficient credit score – FICO 612 vs. minimum 640 required”; “Debt-to-income ratio exceeds 43% guideline”). 
6. Upload/attach the lender’s Adverse Action Notice as a required document. 
7. Input the “Date Action Taken” (must be the actual date the decision was communicated or file became inactive). 
8. Complete the ECOA-required fields: principal reasons for denial, credit score (if used), score range, and contact information for questions. 
9. C2C does not generate the AAN/NOAT; this MUST be generated by the Lender, they will need to comply/fully satisfy ECOA specificity requirements. 
10. Save the changes.

Issue Borrower Notification (NOT sent by C2C)

• The Lender will send the AAN/NOAT to the applicant via the method required by ECOA (mail or electronic with consent) within the 30-day window.
• Retain proof of delivery in ARIVE.

Non-Compliance and Potential Resolution 

Strict adherence is mandatory. Any employee who fails to follow this SOP—including but not limited to missing the lender’s adverse action notice, incomplete file notes for inactivity withdrawals, late AAN issuance, or improper ARIVE entry—will face immediate corrective action.

Consequences include:

1. First violation: Written warning and mandatory retraining.
2. Second violation: Suspension without pay and performance improvement plan.
3. Third violation or willful non-compliance: Termination of employment.

Additionally, violations may expose the company to CFPB enforcement actions, ECOA civil penalties, TRID rescission rights, or licensing sanctions. Management will audit files monthly to ensure 100% compliance.

References

• Equal Credit Opportunity Act (ECOA), Regulation B, 12 CFR Part 1002
• Consumer Financial Protection Bureau (CFPB) Adverse Action Notice requirements
• TILA-RESPA Integrated Disclosure (TRID) Rule, 12 CFR Part 1026
• Company Loan Origination Policy Manual
• ARIVE LOS User Guide – Adverse Action Module

Approval 

Date: May 7, 2026 

Approved by: Bob Bagley

Title: Bob Bagley, Compliance Officer

This SOP is effective immediately upon issuance. All prior verbal or written instructions on file cancellations are superseded. Employees must acknowledge receipt and understanding within 48 hours.

FAQ

Can I switch lenders on my loan file?

• If a loan file has been submitted to and disclosed by a lender, the lender cannot be changed within the same file. The original loan must first be withdrawn or adverse actioned, and a new loan file must be created with the new lender. Please refer to the Knowledgebase article on how to “clone” a loan file.
• If the loan file has not been submitted or disclosed, the lender may be changed without creating a new loan file.