HMDA (Home Mortgage Disclosure Act) What to Know Now & What’s Next? December 16, 2015 Presented by: Susan Costonis, C.R.C.M. Compliance Training & Consulting for Financial Institutions E-mail:susancostonis@msn.com
$167,300 would be 167 and $15,500 would be 16. Pre-approval Code Always 3 if there is no program. Can be a high error field when beginning a pre-approval program Action Taken Type 1 Loan originated 2. Application approved, not accepted. 3. Application denied 4. Application withdrawn by applicant 5 File closed for incompleteness 6. Loan purchased by financial institution 7 Preapproval request denied 8. Preapproval request approved by not accepted (optional) 1. Have copy of the note in file 2. Documentation should be clear. 3. Copy of adverse action notice 4. Document date of withdrawal, only use if it was prior to the credit decision 5. Copy of adverse action notice 6. Copy of purchase info in file. 7. Documentation should be clear and copy of letter. 8. Documentation should be clear and support the preapproval program guidelines. Action Taken Date Date of loan if originated, denial date, withdrawal date, date that customer declined loan approval Copy of note, highlight date; copy of denial; file documentation of withdrawal notice or note to file that customer did not accept approval. MSA/MD FFIEC website Make sure you have geo-coded the correct property and used the CORRECT geo-code year.; don’t’ use appraisal or flood determination information unless verified to FFIEC State “ “ County (Parish) “ “ Census Tract ” “ Ethnicity (Applicant) Request for in-person applications (must make visual observation or surname if the applicant declines to provide it) Read during phone applications; request for mailed applications If the borrower is not a natural person (corporation or partnership) use the code for “not applicable”. The FDIC requires monitoring info for a sole proprietor. Ethnicity (Co-Applicant) “ If there is more than one co-applicant, provide monitoring info for the first listed. Race (Applicant) Applicants can select more than one race, enter all codes they designate Race (Co-Applicant) If there is more than one co-applicant, provide monitoring info for the first listed. Sex (Applicant) If the borrower is not a natural person (corporation or partnership) use the code for “not applicable” The FDIC approval
Answer: Yes, unless the reverse mortgage is a HELOC, for which lenders are not required to report rate spread. . Transition to average prime offer rates --- rate spread. How are the rate spread FAQs affected by the Board’s final rule published on October 24, 2008, 73 FR 63329? Answer: The final rule is effective October 1, 2009. For loans with applications dated on or after that date, the new rules apply. This change affects two of the rate spread FAQs: “Required use of Board-published Treasury security yields” and “Balloon loans --- rate spread.” In the former case, average prime offer rates replace Treasury security yields as benchmarks under the new rate spread determination rules. Use of the Board’s average prime offer rates tables, however, is not mandatory for loans subject to the new rules. Lenders may use the methodology published with the tables to determine average prime offer rates. In the latter case, the FAQ remains valid under the new rules for fixed-rate loans. For variable-rate loans subject to the new rules, however, the applicable average prime offer rate is based on the loan’s initial, fixed-rate period, regardless of whether the loan has a balloon feature. Subsidiaries of depository institutions. How should a sale to a subsidiary of a depository institution be coded? Answer: Use code '6' if the subsidiary is, itself, a depository institution (a commercial bank, savings bank, or savings association). If the subsidiary is not a depository institution, such as a mortgage company or finance company, use code '7'. If the subsidiary is an institution of a type other than the types identified in codes '6' and '7', however, use code '9.' Notwithstanding the foregoing, if the subsidiary is an affiliate of the seller, itself, then use code '8'. HOEPA Status - 05/04/2007 Reverse Mortgages --- HOEPA Status. If a lender reports an application or loan for a reverse mortgage, should a lender report HOEPA status? Answer: Reverse mortgages are not subject to the Home Ownership and Equity Protection Act of 1994 (HOEPA). . Therefore, a lender should enter the code for “not applicable” for HOEPA status. COMPLIANCE RESOURCES Source: