What makes a loan hmda reportable

The LEI is required on the transmittal of the data to confirm the entity exists. In addition, the LEI is a component of the Universal Loan Identifier ULI , which is reported on every application for institutions not subject to the partial exemption.

Can you clarify whether an exempt credit union will need to use an LEI, as we did last year. The info I see, read and researched seems to indicate that we can drop the LEI and simply use loan number this year - despite having used the LEI last year?

Your financial institution shall assign and report an identifier that:. If a financial institution is eligible for the S. If you are not eligible for the S. Do you know if AUS decisions are required on denied loans? Reporting not applicable is only available for purchased loans, when an AUS was not used to evaluate the application, or when the applicant or co-applicant are not natural persons.

Yes, unless the transaction qualifies for any of the criteria for reporting Not Applicable:. What method is used to determine Total Units? For a loan secured by 5 single family properties, would you report 5 units? In the case of 4 unit apartment buildings, would you report ? The determination of Total Units is based on the number of individual units securing the application.

So, for the examples you have provided you would report as you have described — 5 units and units. Enter, in numeral form, the number of individual dwelling units related to the property securing the covered loan or, in the case of an application, proposed to secure the covered loan.

Example: If there are five 5 individual dwelling units, enter 5. If we have a commercial loan that needs to be reported for HMDA, are we required to enter a value in the loan term and interest rate fields? These fields generally do not apply to commercial loans, as they do not relate to Reg B. We are getting a quality edit for not completing these fields in the most recent update in QuestSoft.

Is it acceptable to make them NA? Loan term and interest rate fields may ONLY be reported as not applicable as follows:. ECOA and Regulation B apply to all consumer and commercial credit transactions, with limited exceptions. Regulation B does not apply to public utilities credit, government credit, securities credit, and incidental credit.

See 12 C. Would you please provide further clarification about the credit score and credit scoring model for co-applicant? The logic is a bit confusing. These data points are based off action taken as stated in one of your slides? Then, you are required to report co-applicant credit score as Not Applicable. The following references identify when Not Applicable is reported and describe the validity edit that will trigger if the co-applicant credit score is not reported as for withdrawn, incomplete, and purchased actions.

A Financial Institution reports that the credit score data point is not applicable:. For files with the 4, 5 or 6 action taken designation, both the borrowers and co-borrowers credit scores information is not applicable and 9-not applicable for the credit scoring model regardless of whether or not there is a co-borrower. Is that correct? Yes, the credit score and credit scoring model should be reported as Not Applicable for applications that are withdrawn, incomplete, or purchased.

For the scenario you describe, the correct reporting would be Not Applicable. The excerpt below from the Final Rule indicates that when a credit score is requested, but not available — you would report Not Applicable. Do you have a list of what is required for denied loans? Data requirements are consistent across all actions. Although there is no formal guidance indicating whether a lender should report 2-Not collected on the basis of visual observation or 3-Not applicable for applications NOT taken in person, the CFPB has indicated that either code will be acceptable reporting for submissions.

When an application is not taken in person, can the collection questions be left blank on the Demographic Information section of the loan application? Will examiners require a selection on the form itself? HMDA does not define the requirements for documenting the applicant demographic information.

Appendix B provides a sample collection form, but does not identify the form as a required document. You must ask the applicant for this information but you cannot require the applicant to provide it whether the application is taken in person, by mail or telephone, or on the internet.

For applications taken by telephone, you must state the information in the collection form orally. Can you please explain the fields that have changed with regards to the fields associated with Property Location? The HMDA data requirements for reporting property location are as follows:.

CFPB geocoding sites? The CFPB has not yet launched their geocoding tool. If a financial institution chooses to use an alternative geocoding tool that constitutes a procedure reasonably adapted to avoid census tract errors, the financial institution will receive the same Safe Harbor protections. If the primary Applicant does not have a spousal Co-Applicant, is the non-spousal co-borrower considered a co-applicant for HMDA purposes?

HMDA does not differentiate between spousal and non-spousal co-applicants. If an application includes two co-borrowers, all data should be reported for both applicants. Would you please explain how the loan purpose should be reported if the code is 6 purchased loan? Last year we reported NA. Loan purpose must be reported on all HMDA applications.

Reporting 5-Not Applicable is only permitted for purchased loans where the origination took place prior to January 1, Official interpretation of Paragraph 4 a 3 - 6.

Purpose - purchased loans. Can you explain when you report Total Loan Costs vs. Total Points and Fees? Are both ever reported for a loan? If a borrower does not provide age or a date of birth, can we report Not Applicable for Age? I f a borrower does not provide age or a date of birth, can we report Not Applicable for Age?

Can you provide additional information regarding business and commercial loan purpose? Does this include investment property? The determination of whether a business or commercial purpose loan or application is HMDA reportable is defined by the purpose of the loan. Only dwelling related home purchase, home improvement or refinancing purpose business or commercial transactions are HMDA reportable. A closed-end mortgage loan or an open-end line of credit to purchase or to improve a multifamily dwelling or a single-family investment property, or a refinancing of a closed-end mortgage loan or an open-end line of credit secured by a multifamily dwelling or a single-family investment property.

I am seeing errors on applications related to reverse mortgages. My institution does not report reverse mortgages, why am I getting these errors? Reverse Mortgage is a required data point on all applications. The field values for Reverse Mortgage include:. What do we do if we get the error codes V and V? V edits are related to Credit Score and must be corrected prior to submission.

V indicates that the Credit Score of the Applicant is either blank or not a number. We qualify for the partial exemption. When I attempted to upload our file for the beta testing, the file was not accepted due to errors related to purchased loans that automated where we had used the exempt code for underwriting fields. For example, prequalifications are not reported, while applications for a home purchase loan in preapproval programs generally are.

Technical changes, frequent violations, and the need for accurate data underscore the importance of discussing ways that reporting institutions can strengthen their HMDA data collection, verification, and reporting processes.

This article discusses sound practices identified by examiners and suggests compliance management program improvements to help financial institutions strengthen their HMDA collecting and reporting practices. For HMDA reporters, management is responsible for ensuring procedures are in place to collect and maintain accurate data regarding each loan application, loan origination, and loan purchase that must be reported.

Further, the board and management also need to ensure the institution provides individuals assigned responsibility for preparing and maintaining the data appropriate training regarding the regulatory requirements, resources, and tools needed to report complete and accurate HMDA data.

Sound practices for successful data collection include creating effective procedures, providing useful tools to staff members responsible for HMDA data collection, and delivering comprehensive training.

The following strategies are suggested to help achieve an effective HMDA program. Successful data collection starts with developing HMDA data collection procedures. Effective HMDA procedures document processes for identifying all HMDA reportable transactions and develop consistent approaches for identifying the underlying source of information for reporting data fields on the HMDA loan application register LAR to ensure accurate data collection.

Although HMDA applies to both depository and nondepository financial institutions, this article only addresses the requirements for depository institutions. Once an institution confirms it is covered by HMDA, the next step in the data collection and reporting process is to identify all HMDA reportable transactions.

Generally speaking, unless a transaction is expressly excluded under 12 C. An institution that incorrectly determines whether HMDA applies to a particular transaction could collect GMI when it is not required, or fail to collect it when it is, resulting in examination violations and potential fair lending issues.

HMDA reporting requirements apply to loans or applications that satisfy the following requirements:. But even if a HMDA reporter is partially exempt, it must still collect and report the nonexempt data points. The open- and closed-end exemptions operate independently from each other; an institution may qualify for one partial exemption but not the other.

Further, business lines other than those offering traditional residential mortgages may offer credit extensions that require the institutions to collect and report HMDA data. For example, the commercial loan department may originate purchase-money loans for multifamily buildings such as apartment, cooperative, or condominium buildings. Originating HMDA-reportable transactions in multiple business lines makes identifying and collecting data more challenging, and staff in nonmortgage origination business lines may not be as mindful of HMDA requirements in day-to-day operations.

As a reminder, this table is illustrative; other types of loans may be HMDA reportable. The purpose test now only applies to dwelling-secured loans with a business or commercial purpose. Institutions have different methods of ensuring that they accurately identify HMDA-reportable transactions. At some institutions, lenders are initially responsible for identifying HMDA-related applications, and the compliance department confirms lenders identified all covered applications by comparing the new loan list with the HMDA LAR.

Larger reporters often use automated systems to identify HMDA-reportable transactions. It is also important that financial institutions have a process to track nonoriginated loan applications, such as denied, withdrawn, approved but not accepted, or incomplete applications that have a HMDA purpose.

If an institution has a largely manual HMDA process, a centralized review of all nonoriginated loan applications can help ensure the institution reports nonoriginated applications appropriately. Deciding how an organization will handle certain HMDA scenarios, such as determining the specific information to report for which the regulation allows some latitude , eliminates guesswork and ensures consistency across business lines.

Some examples of situations in which the bank should determine in advance how it will respond include:. Centralizing data collection can be an effective way to reduce reporting errors by reducing the number of people in the data collection process. Smith is cashing out of a free and clear investment property dwelling for a future investment. If that future investment is the purchase of a dwelling, then it is HMDA reportable. If the investment is to buy that printing business, then it is not HMDA reportable.

Make sure there is sufficient information in the files to determine whether the loan is HMDA reportable. See Scenario 3 above. Once a determination is made that we have a business purpose, HMDA reportable transaction, there are some HMDA fields that are reported and other fields that are not applicable to business transactions. We have provided a chart to help navigate through these HMDA fields for a business purpose loan.

Skip to content The passing of Senate Bill adds another level of complexity to an already complex Regulation. A consumer purpose, dwelling secured loan is HMDA reportable regardless of purpose. A business purpose, dwelling secured loan is only HMDA reportable if the purpose of the loan is to purchase a dwelling, refinance a dwelling or improve a dwelling or the real property on which the dwelling is located.

Is the headache starting yet? Age X X Report information using standard reporting rules for natural persons. Income X X Report information using standard reporting rules for natural persons.