From loan purpose uncertainty to post-closing data corrections, these were the HMDA Hub questions that drew the most interest and attention from readers this year. As your LAR preparation ramps up, take a look at the HMDA topics and data points compliance teams focused on most.
1. Counteroffers: Offering a higher loan amount after appraisal
A borrower applies for a loan which is 90% of the estimated value of the home, and the appraisal comes in higher than expected, so we offer a higher loan amount (for LTV reasons) that is 90% of the new value. The borrower accepts the higher loan amount. Is that still a counteroffer even though the amount granted was higher than initially requested? See answer
2. Determining loan purpose when property type is unclear
In cases where the borrowers indicated they will be using HELOC funds as a down payment to purchase a “property”, how should the Loan Purpose be reported when we do not have specific knowledge of whether the property is a dwelling? See answer
3. Updating HMDA data after a corrected closing disclosure
Our auditor told us that we need to adjust HMDA data based on a corrected post-closing Closing Disclosure (CD). Which fields need to be updated? See answer
4. Income and DTI reporting for W-2 and asset-based income
If our underwriters considered both W-2 and asset-based income during the underwriting process, how do we report Income and Debt-to-Income Ratio? See answer
Navigating data anomalies, mapping challenges, or limited bandwidth? CrossCheck can support your process through systemic data reviews, manual file reviews, ongoing monitoring, disparity analysis, and customized training. Reach out to learn more.
5. Selecting the correct NMLSR ID when multiple originators are involved
We have a loan that involved multiple loan originators in the application process. What should we report on our LAR for the NMLSR ID number? See answer
6. DTI and income reporting for borrowers with $0 income
In instances where a borrower has $0 income and is denied, our Loan Origination System will calculate a Debt-to-Income (DTI) ratio only if there is an amount in the income field. Should we report a placeholder value for income so the DTI ratio will calculate, or should we report “0” for Income and “0” for DTI Ratio? See answer
7. Applications with outstanding closing conditions
We have an application that was conditionally approved by underwriting. The only outstanding conditions were homeowners’ insurance and a title for clear to close. The borrower notified the loan officer that he was not moving forward with the loan. Would this be decisioned as Approved, Approved but Not Accepted, or Withdrawn for HMDA purposes? See answer
8. HOEPA status for institutions that do not make high-cost mortgages
Our institution has a policy that we do not make high-cost mortgages. How should we report HOEPA status on our LAR? “Not applicable” or “Not a high-cost mortgage”? See answer
Ask CrossCheck
Are you grappling with a HMDA compliance issue? We invite you to send your question to our team of HMDA compliance consultants for future editions.
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