HMDA After January 2018

In 2018, the reporting requirements  extend to more mortgage transactions. Today 2017 June, the HMDA reporting requirements apply only to closed-end home purchase and home improvement loans and refinances.
As of January 1, 2018, the following loan types will be subject to reporting requirements:
  • Closed-end home purchase loans
  • Closed-end refinances
  • Closed-end home improvement loans
  • Open-end mortgages
  • Home equity lines of credit
  • Reverse mortgages
(12 C.F.R. §1003.2(e))

The applicability of HMDA and Regulation C does not depend on the use of a home as a principal dwelling.  Therefore, even loans that are secured by second homes, vacation homes, or rental properties are subject to the law (Official Interpretations to 12 C.F.R. §1003.2(f), 1.).  Simply stated, HMDA applies to all dwelling-secured loans, and amended Regulation C broadly defines the term “dwelling” to include most residential structures, including detached homes, individual condominium or cooperative units, manufactured homes, multifamily structures, and multifamily communities (12 C.F.R. §1003.2(f)).

Small companies must comply, keep records and report.
Seems like small mortgage banking or brokerages must hire legal
staff to keep up with the law

Exempt  from HMDA’s reporting requirements:
  • Loans secured by unimproved or vacant land, unless the lender knows that loan proceeds will be used within two years of closing to construct a dwelling
  • Construction loans or bridge loans
  • Loans for less than $500
  • Loans secured by property used for agricultural purposes
  • Loans secured by property used primarily for business or commercial purposes

Other exemptions include transactions for the purchase of servicing rights to a loan, mortgage loans acquired through mergers and acquisitions, and the purchase of mortgage-backed securities. These exemptions are currently scattered throughout the regulations, but the new rules that are effective in 2018 place the HMDA exemptions in Section 1003.3(c) of Regulation C.

Data Collected for HMDA Reporting until December 2017

  • Loan information:
    • An identifying number for the loan or loan application
    • The purpose of the loan (home purchase, refinancing, home improvement)
    • Lien status
    • An indication of whether the related dwelling is owner-occupied
    • Loan type (conventional, FHA, VA)
    • Type of dwelling securing the loan (one- to four-family dwelling, multifamily dwelling, manufactured home)
    • Loan amount
    • Application date
    • Action taken on the loan (approval or denial) and date the action is taken
  • Location of the property related to the loan application
  • Demographic information about the applicant (gender, race, ethnicity, and gross income)
  • Loan purchase information
  • Loan pricing information (used to identify reverse redlining)
  • Denials for pre-approval requests and information on approvals that led to loans 

  • 2018,  data collection categories, consisting of the current plus the new categories:
    • Identifiers for loans and lenders: A universal loan identifier made up of 45 alpha-numeric characters will identify the loan or loan application, and a 20-character alpha-numeric code will identify the financial institution involved in the transaction.
    • Underwriting information: The information related to underwriting will include the loan applicant’s credit score, credit scoring model, LTV ratio, DTI ratio, property value, and reason(s) for denying a loan application.
    • Demographic information: In addition to information already reported, loan originators must report an applicant’s age and must offer applicants the option of providing more details on their race and ethnicity.
    • Loan terms and pricing: New rules require the reporting of a loan’s (or a proposed loan’s) APR, difference between the APR and average prime offer rate, loan costs, points, lender credits, amounts disclosed as borrower-paid, interest rate, prepayment penalty provisions, loan term, number of months between origination and rate changes for ARMs, interest-only payments, balloon payments, and any payment provisions resulting in negative amortization.
    • Property information:  address, census tract, value of the property, and its use as a residence, second home, or investment property.
    • Identification of loan originator: Data reported for each transaction must include the NMLS unique identifier of the mortgage loan originator who provided loan origination services for the loan or application.
    • Disposition: Lenders must report approvals, denials, and an applicant’s withdrawal of an application. Denials of requests for preapprovals are also reported, and even if an approval does not lead to the origination of a mortgage, the approval must be reported.
    • Loan application channel: Lenders must indicate whether a consumer submitted an application directly to a lender or to a mortgage broker.
    (12 C.F.R. §1003.4(a))

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