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HMDA Questions – Get It Right

“When the HMDA rule was originally enacted in 1975, it required depository and non-depository institutions to collect and report data about mortgage originations. On October 15, 2015, the scope of the rule changed—expanding reporting coverage for non-depository institutions, increasing transactions covered, and increasing data elements to report. The new HMDA rule now requires 48 data points be collected, recorded and reported: 25 are new data points (including total loan costs or total point and fees, automated underwriting system, and open-end line of credit) and 14 are modified from the previous rule.”[1]

Enough said. With this type of expansive change to the HMDA-reporting and -recordkeeping rules, there are bound to be questions. Here’s a sample.

Q: For HMDA recordkeeping and reporting, what’s the story on HELOCs?

A: Beginning January 1, 2018, covered loans under the HMDA rule will include not just closed-end mortgages, but also “open-end lines of credit secured by a dwelling” (i.e., HELOCs). Not every financial institution will be subject to the rule. Institutions that originated at least 25 closed-end mortgages or 100 HELOCs in each of the two preceding calendar years will be required to collect, record, and report HELOC data under HMDA.

Q: We have always relied on the Federal Financial Institutions Examination Council’s software (reporting to the Federal Reserve Board) each year for HMDA reporting. We’ll be able to continue using it, right?

A: There are no changes to the submission process for HMDA data collected by financial institutions in 2016. Financial institutions will file HMDA data with the Federal Reserve Board (FRB) using the FRB’s instructions, file specifications, and edits familiar to HMDA users. Please visit the FFIEC website for resources to help you file.

There is a new data submission process beginning with HMDA data collected by financial institutions in or after 2017. Financial institutions will file HMDA data with the Consumer Financial Protection Bureau (CFPB). The HMDA agencies have agreed that filing HMDA data collected in or after 2017 with the CFPB will be deemed submission to the appropriate Federal agency. You should refer to the FFIEC and the CFPB websites for resources to help you file.

Q: What if we need to resubmit HMDA data following the change to the reporting process?

A: There is a new data resubmission process beginning with HMDA data collected by financial institutions in or after 2017. Financial institutions will resubmit HMDA data collected in or after 2017 by filing with the Consumer Financial Protection Bureau (CFPB). Refer to the FFIEC and the CFPB websites for resources to help you file.

Q: We keep the loan application register (LAR) to aggregate data for HMDA reporting? Is there anything we need to know about identifying our loan transactions on the LAR under the new HMDA rules?

A: If your organization originates loans that will be required to be reported on a HMDA Loan Application Register (LAR), you will need to obtain a Legal Entity Identifier, or LEI. This string of 20 characters is used in part to create the 45-character Unique Loan Identifier (ULI) that must be assigned to each loan reported on the LAR. You may obtain your LEI from the Global Market Entity Identifier Utility website at www.GMEIUtility.org.[2]

Have more HMDA recordkeeping and reporting questions? Ask the Compliance Experts, or, use these additional resources:

Mortgage Compliance Magazine,
June 2017
Mortgage Compliance Magazine,
December 2016

 

Around the Industry:

Effective Now:

The time to comply with new HMDA rules is now.

On the Horizon:

FDIC Summer 2017 Consumer News highlights 10 popular scams plaguing customers. How do they compare to your risk management?

MCM Q&A

How are you recapturing EPO or EPD fees? How might it affect your loan officer compensation practices? See this for more.

 

 

 

 

 

[1] Wu, B. (2017, June). Keep Calm and Compliance On. Mortgage Compliance Magazine, pp 40-43.

[2] Kilka, L. (2017, June). The Roadmap to HMDA Implementation. Mortgage Compliance Magazine, pp 36-39.

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