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HMDA Part 2: How to Report Purchased Loans

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 ReportingReport as  Not  ApplicableOptional  Reporting  PermittedComments/Instructions
ULI XUse 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 DateXUse NA 
Loan Type X
Loan Purpose X**Report Code 5 (not applicable) if the loan was  originated prior to 1/1/18. 
Pre‐Approval X
Construction Method X
Occupancy X
Loan Amount X Report the principal balance as of the date of  purchase.
Action Taken XThis field will always be “6” ‐ Purchased 
Action Taken Date XDate of loan purchase.
Property AddressX
Property Location X
GMI InformationXXEthnicity = 4; Race = 7; Sex = 4 for Not Applicable. 
GMI Information Obtained XXUse Code 3 for Not Applicable. 
AgeXXUse 8888 for not applicable 
Income XXReport NA 
Purchaser XEnter “0” unless you subsequently sell the loan during  the same calendar year. 
Rate Spread X
Lien Status X
Credit ScoreXUse 8888 for Not Applicable 
Reason for Denial XThis 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 XUse NA always
Debt‐to‐Income RatioXUse NA always
Combined LTV XUse NA always
Interest Rate X
Pre‐payment Penalty TermX
Loan Term X
Introductory Rate Period X
Balloon Payment  X
Interest Only Payments X
Negative Amortization X
Property Value X
Manufactured Home  Secured Type X
Manufactured Home  Property Interest X
Total Units X
Multifamily Affordable  Units X
Submission of Application XCode 3 is not applicable 
Initially Payable XCode 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 XAlways Use “6” for Not Applicable 
AUS Results XAlways Use “17 for Not Applicable 
Reverse Mortgage X
Open‐end Line of Credit X
Business PurposeX

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!

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