Topic: Home Mortgage Disclosure Act of 1975 (HMDA)
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How can we obtain a Legal Entity Identifier (LEI)? We are not a reporter under the Home Mortgage Disclosure Act (HMDA), but our HMDA software is requiring us to provide an LEI.
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Your bank may obtain an LEI by applying online with an acceptable LEI issuer. While we cannot recommend any particular utility for obtaining an LEI, two examples of acceptable LEI issuers are the Global Market Entity Identifier Utility, or GMEI Utility, and Bloomberg. While we understand that your bank is not subject to HMDA reporting…
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Is our bank required to provide takeaway notices along with our posted HMDA Data Availability Notice? We currently provide takeaway notices in paper form in a slot next to our posted notice.
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No, there is no requirement to provide takeaway versions of the two HMDA notices to all of your customers, provided that your bank has procedures in place to furnish a copy of the required notices to customers who request them. Regulation C requires your bank to provide two HMDA notices to members of the public…
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Is our bank required to complete a HMDA loan/application register (LAR) if we originated fewer than 25 closed-end mortgage loans and fewer than 500 open-end lines of credit in the preceding two calendar years? Will a spreadsheet documenting the number of closed-end mortgage loans and open-end lines of credit originated per month be sufficient to verify that we originated fewer than 25 closed-end mortgage loans and fewer than 500 open-end lines of credit in those years?
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Your bank is not required to complete and submit an LAR this year if it originated fewer than 25 closed-end mortgage loans and fewer than 500 open-end lines of credit in either of the two preceding calendar years. Your bank also would not be subject to HMDA’s reporting requirements if it does not meet the…
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Are there any size requirements for the following lobby notices: CRA Notice, Annual Financial Disclosure Notice, Equal Housing Poster, HMDA Data Availability Notice, and Regulation CC Funds Availability Notice? Can these notices be displayed on an electronic board that switches between the notices? What does the term “prominently displayed” mean with respect to the Equal Housing Poster? Also, can you confirm that we are not required to disclose our rates on a rate board in our lobby?
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There are size requirements for some (but not all) of the notices listed in your questions. If there are no express size requirements, generally these notices should be sized and placed so that customers are able to see the notices and easily read their text. Each notice is addressed separately below. CRA Notice: The size…
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We were advised that our software will need to be updated so that FICO credit scores and debt service coverage ratio (DSCR) data will be reported under a new regulation taking effect in 2020. Is this accurate, and does the regulation relate to Home Mortgage Disclosure Act (HMDA) reporting or credit reporting?
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We are not aware of any regulatory changes in 2020 relating to the reporting of FICO credit scores or DSCR data. The recent HMDA rule changes do include new credit score and debt-to-income ratio reporting requirements for certain institutions, but those provisions have been in effect since January 1, 2018. The only remaining provisions from…
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We extended a dwelling-secured, five-year, fully-amortizing loan to pay for the borrower’s construction costs to build a primary residence. We disbursed the loan proceeds directly to the borrower. Is this loan reportable under the Home Mortgage Disclosure Act (HMDA)?
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Under the new HMDA rules that took effect in 2018, if the construction loan is designed to be replaced by permanent financing at a later date (in other words, a two-phase loan), the first phase of the construction loan is excluded from HMDA reporting as a temporary loan. However, if the construction loan is not…
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For HMDA reporting purposes, when we make a mortgage loan to both a land trust and an individual who is a beneficiary of the land trust, should we list the land trust as a co-applicant or co-borrower? The beneficiary of the land trust signed the note individually, and the trustee signed the note on behalf of the land trust.
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Yes, we believe you should list a land trust as a co-applicant or co-borrower on your HMDA report when the trust is a co-obligor on the note. The official commentary to Regulation C recognizes that a co-applicant may be a non-natural person, such as a trust, and provides that the requirement to report a non-natural…
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I have a HMDA reporting question for loans that are denied for non-income related reasons. Our HMDA software is producing quality and validity edits when we enter “NA” for fields that were not considered in issuing the denial. For example, if we deny an application due to the applicant’s credit score, we enter “NA” in the fields for income, property value, LTV, DTI, etc. What should the entry be for data not considered in issuing the denial?
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Our understanding is that all of the HMDA data fields mentioned in your question may be reported as “NA” because they are not considered in making a credit decision. Your software vendor may be able to shed more light on the significance of the quality and validity edits — it may be the case that…
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I have a HMDA question on reporting a credit score of “NA.” When I use the code “7777” and use the agency that provides the score (such as Transunion), I receive a Quality Edit Error. How should we be coding these credit scores?
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According to the CFPB’s filing instructions guide, “8888” is the entry that should be used when the credit score is not applicable (NA). The “7777” entry is intended for a credit score that is not a number. For resources related to our guidance, please see: CFPB, Filing Instructions Guide for HMDA Data Collected in 2018,…
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We are a HMDA reporting bank. We had a corporate customer borrow money to purchase a 1–4 unit family dwelling. The loan is secured by the dwelling and the customer’s business assets. The credit decision was based on both the value of the dwelling and the business assets. For HMDA reporting purposes, would the property value include both the value of the dwelling and the business assets or just the value of the dwelling? For the combined loan to value ratio, should the loan amount be divided by the combined value of the collateral or just the value of the dwelling?
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For HMDA reporting purposes, the reported value of the property securing the covered loan includes only real property. Regulation C itself requires reporting “the value of the property securing the loan,” but it does not specify whether the value of the property to be reported is restricted to real property. Regulation C is implementing a…