Topic: Home Mortgage Disclosure Act of 1975 (HMDA)
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Under the new HMDA rules, we are required to obtain a legal entity identifier number (LEI). I saw a webinar in which Fannie Mae and Freddie Mac recommend obtaining an LEI from the Global Market Entity Identifier (GMEI) Utility. Does the IBA recommend any particular utility (or other entity) for obtaining an LEI?
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While we do not recommend any particular utility for obtaining an LEI (which is a necessary component of the required Universal Loan Identifier), the GMEI Utility certainly is an acceptable LEI issuer for HMDA filing purposes. Before the LEI requirement in the HMDA final rule takes effect on January 1, 2018, HMDA reporters must obtain…
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When I am reviewing denied, withdrawn and incomplete loan files for compliance with Regulation B, Regulation C, and Regulation Z, the Uniform Residential Loan Application often is missing the application date. This makes it very difficult to review a loan file for compliance with these regulations. Would it be acceptable to use the Loan Estimate date as the application date in these files?
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We believe that it is possible, but very unlikely, that the Loan Estimate date is an appropriate substitute for the application date under Regulation B, Regulation C, or Regulation Z. Each of the three regulations has its own definition of application, the receipt of which triggers separate, unique obligations. In order to ensure compliance with…
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If we do not identify the date on which a loan application is “completed” under Regulation B, what date should we use as the application date on an adverse action notice? Would it be acceptable to use the application date under either HMDA or the TRID rule?
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We believe that either the HMDA or the TRID application date may serve as an acceptable substitute for the purpose of sending adverse action notices under Regulation B, depending on what your internal policies require for an application to be considered “complete.” Regulation B requires you to send out adverse action notices within 30 days…
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If we make a counteroffer on a consumer loan application, what type of notice should we provide, and what are the timing requirements? We have the options of sending a denial notice, a notice of an application approved but not accepted, etc.
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When making a counteroffer to a loan applicant, Regulation B provides two options for providing an adverse action notice. One option is to provide a counteroffer combined with an adverse action within 30 days after receiving a completed loan application. The other option is to provide a counteroffer without including an adverse action notice; after…
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We would like to establish a centralized underwriting process where our bank will receive applications and forward them to our holding company. The holding company will review the application, make the credit decision based on its own lending criteria, and send the application back to our bank to close the loan. In this process, who should report the loan under the Home Mortgage Disclosure Act (HMDA)?
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We believe that your holding company is responsible for reporting the loan originations under HMDA, unless it is acting as your agent in making the credit decision (which does not appear to be the case here). Only one financial institution reports the origination of a covered loan. When multiple entities are involved in the origination…
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I need assistance filling out FFIEC Call Report Schedule RC-C – Loans and Leases. Specifically, when asked to list maturity and repricing data for closed-end loans secured by first liens on 1-4 family residential properties (in the Memoranda for Part I), should I include commercial purpose loans secured by residential property? Are there any OCC bulletins that offer guidance on this question?
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Yes, in the section you have identified, you should include data on all loans secured by a 1–4 family residential property, regardless of the loan purpose. You asked about Call Report Schedule RC-C (Loans and Leases). Specifically, you asked about question 2 on the Memoranda for Part I, which asks you to list the following: …
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A borrower is refinancing her first mortgage with us in order to pay off a personal loan from another bank. For HMDA reporting, based on the purpose of the transaction, should the loan be considered a purchase loan or a refinance? We also note that the original mortgage was in the name of the customer, but the refinancing will be in the name of her revocable living trust, with the customer signing as the trustee.
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In our view, the transaction does not satisfy the definition of either a purchase loan or a refinancing under Regulation C and likely is not reportable under HMDA. HMDA requires lenders to report demographic data on certain types of transactions, including home purchase loans, home improvement loans, and refinancings. A home purchase loan is a…
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We have a business loan for $900,000, secured by several 4 – 6 unit residential properties. How do we accurately report this loan on the HMDA Loan Application Register (LAR)?
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The Official Comments for Regulation C provide two options for reporting a loan that is secured by multiple properties. One option is to report the loan under a single LAR entry, using the location of just one of the properties securing the loan. The second option is to report the loan under multiple LAR entries…
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We had a loan applicant who applied for a loan in person, and we have rejected the application. We later discovered that the applicant did not receive the questionnaire that we use to collect government monitoring information (GMI). For HMDA reporting purposes, how should we report the GMI for this application?
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We recommend contacting the applicant and providing the opportunity to self-report his or her GMI (race, ethnicity and gender). While this will not correct the failure to obtain the GMI at the time of the loan application, it will allow you to demonstrate to examiners that you have attempted to meet the spirit of the…
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For HMDA reporting purposes, if a borrower has an income of $98,499.12, should we round that down to $98,000 or up to $99,000?
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The Home Mortgage Disclosure Act and Regulation C require banks to round income to the nearest $1,000 (with $500 rounding up to the next $1,000). In this case, $98,499.12 rounds down to $98,000.00 and would be reported in thousands as “$98”. For resources related to our guidance, please see: Regulation C, 12 CFR 1003, Appendix…