TCA published Part 1 on August 23, 2018 describing managing HMDA risk amid reporting uncertainty. Shortly thereafter, the CFPB published additional guidance on August 31, 2018, as noted the same day as our Special Release. Due to the HMDA ambiguity and uncertainty, TCA is committed to providing bankers with A Better Way to decipher various sections of HMDA 2018 compliance and we will focus on topics based upon banker feedback.
Also, register for TCA’s urgent webinar devoted to HMDA compliance on September 12, 2018 based on CFPB new rules.
This Part 2 in a three‐part series drills down on the HMDA reporting requirements for purchased loans that have always been slightly different than in‐house‐originated loans. With the 2018 reporting requirements, we have new fields, along with a new question: Just what gets reported on purchased loans? Following is a Guide to reporting purchased loans.
Many of the fields permit optional reporting and each bank will have to decide whether it will report the optional information. In addition, voluntarily reporting “optional” information does expose the filer to the risk of additional HMDA errors.
|HMDA Field||Use Standard Reporting Rules||Modified Reporting||Report as Not Applicable||Optional Reporting Permitted||Comments/Instructions|
|ULI||X||Use the ULI that was assigned by the financial institution that originated the covered loan. Purchaser will be required to assign a ULI only if the covered loan was not assigned a ULI by the financial institution that originated the loan. Examples of such cases include when a loan was originated prior to January 1, 2018, or the loan was originated by an institution that was not a HMDA reporter.|
|Application Date||X||Use NA|
|Loan Purpose||X||*||*Report Code 5 (not applicable) if the loan was originated prior to 1/1/18.|
|Loan Amount||X||Report the principal balance as of the date of purchase.|
|Action Taken||X||This field will always be “6” ‐ Purchased|
|Action Taken Date||X||Date of loan purchase.|
|GMI Information||X||X||Ethnicity = 4; Race = 7; Sex = 4 for Not Applicable.|
|GMI Information Obtained||X||X||Use Code 3 for Not Applicable.|
|Age||X||X||Use 8888 for not applicable|
|Purchaser||X||Enter “0” unless you subsequently sell the loan during the same calendar year.|
|Credit Score||X||Use 8888 for Not Applicable|
|Reason for Denial||X||This will always be “10” as the loan was not denied.|
|Total Loan Costs||X*||*Use NA if loan application was received by selling entity prior to effective date of TRID (10/3/15).|
|Origination Charges||X*||*Use NA if loan application was received by selling entity prior to effective date of TRID (10/3/15).|
|Discount Points||X*||*Use NA if loan application was received by selling entity prior to effective date of TRID (10/3/15).|
|Lender Credit||X*||*Use NA if loan application was received by selling entity prior to effective date of TRID (10/3/15).|
|Total Points and Fees||X||Use NA always|
|Debt‐to‐Income Ratio||X||Use NA always|
|Combined LTV||X||Use NA always|
|Pre‐payment Penalty Term||X|
|Introductory Rate Period||X|
|Interest Only Payments||X|
|Manufactured Home Secured Type||X|
|Manufactured Home Property Interest||X|
|Multifamily Affordable Units||X|
|Submission of Application||X||Code 3 is not applicable|
|Initially Payable||X||Code 3 is not applicable|
|NMLS Number||X||*||*||*NA is permissible if the loan was subject to 12 CFR 1026.36(g) and was originated prior to January 10, 2014; or if the loan was not subject to coverage criteria of Regulation Z 12 CFR 1026.36(g) and was originated prior to January 1, 2018. In both these cases, the purchaser may optionally report the NMLS ID. For loans originated on or after January 1, 2018, the NMLS ID number is required to be reported, unless an NMLS ID was not required and the mortgage loan officer was not assigned an NMLS ID.|
|AUS||X||Always Use “6” for Not Applicable|
|AUS Results||X||Always Use “17 for Not Applicable|
|Open‐end Line of Credit||X|
Our HMDA team is here to assist with your HMDA reporting questions. Concerned about how your LAR is shaping up for 2018? Call TCA to discuss an early HMDA validation of your processes.
HMDA S.2155 has been clarified – or has it? Learn why compliance is “not a piece of cake” on 9/12. Join TCA’s Monique Reyna and Michelle Strickland for this timely webinar!