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HOME MORTGAGE DISCLOSURE ACT
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PRESENTED BY
ANNE LOLLEY and
TOTAL TRAINING SOLUTIONS2
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BACKGROUND AND
APPLICABILITY
PAGE 46
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BACKGROUND
Home Mortgage Disclosure ActReferred to as HMDAEncourages loans to inner-cityNo lending requirementsCollect & report data
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SUPPLEMENTAL INFO
Reg C + Commentary
FFIEC website – www.ffiec.gov
Guide to HMDA Reporting – Getting it Right
FFIEC’s FAQ (page 24)
LAR Codes and Instructions Chart (page 16)
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REPORTING INSTITUTIONS
HMDA reporting is required if: Assets over $43 million, and Home/branch office in MSA
Threshold changes annually9
METROPOLITAN STATISTICAL AREAS
www.ffiec.gov/census
Guide to HMDA Reporting
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HMDA REQUIREMENTS
Collect monitoring dataCollect more data on worksheetEnter data into LAR quarterlySubmit LAR annuallyMake FFIEC disclosure availableMake modified LAR availablePost notice of availability
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HMDA LOANS
APPLICATIONS / ORIGINATIONS / PURCHASES
HOME PURCHASE
LOANS
HOME IMPROVEMENT
LOANSREFINANCINGS
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HMDA LOANS . . .
EXEMPTIONS
HELOCS TEMPORARY LOANS(CONSTRUCTION & BRIDGE)
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SECOND, PERMANENT LOAN
IS EXPECTED
TEMPORARY LOANS
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HMDA LOANS
HMDA could apply to:Business loansNon-real estate loans
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APPLICABILITY
Home-purchase loans
Home-improvement loans
Refinancings16
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APPLICABILITY
HOME-PURCHASE LOAN
1. Purchase dwelling
AND
2. Secured by dwelling17
DOES NOTHAVE TO BE
SAME DWELLING
APPLICABILITY
HOME-IMPROVEMENT LOAN #1
1. Improve dwelling
AND
2. Bank classifies as home improvement18
REGARDLESS OF WHETHER LOAN IS
SECURED BY DWELLING
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APPLICABILITY
HOME-IMPROVEMENT LOAN #2
1. Improve dwelling
AND
2. Secured by dwelling19
DOES NOTHAVE TO BE
SAME DWELLING
APPLICABILITY
REFINANCING
Old loan secured by dwelling
AND
New loan secured by dwelling
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DOES NOTHAVE TO BE
SAME DWELLING
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HMDA LOAN TYPES
PAGE 721
HMDA LOAN TYPES
Business loansNon-real estate loansHome equity lines of creditTemporary loansPurchase-and-rehab loansPreapprovals and qualificationsDual-purpose loansMultiple properties
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HMDA LOAN TYPES
BUSINESS-PURPOSE LOANS
Dwelling to resell for profit
Rental property
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HMDA LOAN TYPES
NON-REAL ESTATE LOANS
Manufactured homes
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HMDA LOAN TYPES
HOME-EQUITY LINES OF CREDIT . . .
Optional reporting
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HMDA LOAN TYPES
EXEMPT TEMPORARY LOANS
Construction loansBridge loans
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UNDER RESPA . . .ONLY EXEMPT IF
UNDER TWO YEARS
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HMDA LOAN TYPES
NOT TEMPORARY LOANS Combined construction/perm loan Perm loan to replace temporary
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THESE ARE NOT “TEMPORARY”HMDA APPLIES
HMDA LOAN TYPES
PURCHASE AND REHAB One loan – HMDA applies
Two loans – First/temp loan is exempt
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HMDA LOAN TYPES
PREAPPROVAL ONLY REPORTABLE IF INSTITUTION HAS PROGRAMREQUIRINGFULL REVIEW OF CREDITWORTHINESS A WRITTEN COMMITMENT
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HMDA LOAN TYPES
PREQUALIFICATIONWHETHER PROSPECTIVE APPLICANT
WOULD LIKELY QUALIFY FOR CREDIT
NOT AN APPLICATION - NOTREPORTABLE
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HMDA LOAN TYPES
DUAL-PURPOSE LOANS
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LOAN PURPOSE REPORT LOAN AS
PURCHASE + REFINANCING PURCHASE
PURCHASE + HOME IMPROVEMENT PURCHASE
REFINANCING + HOME IMPROVEMENT HOME IMPROVEMENT
HMDA LOAN TYPES
MULTIPLE PROPERTIES
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LOAN TYPE REPORT THIS PROPERTY
HOME IMPROVEMENT
PROPERTY BEING IMPROVED
MORE THAN ONE – ANY OR MULTIPLE
HOME PURCHASE
PROPERTY TAKEN AS SECURITY
MORE THAN ONE – PROPERTY BEING PURCHASED
MULTIPLE PURCHASED – ANY OR MULTIPLE
REFINANCING PROPERTY TAKEN AS SECURITY
MORE THAN ONE – ANY OR MULTIPLE
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TERMS AND
DEFINITIONS
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TERMS & DEFINITIONS
ApplicationDwelling Home improvementHome purchaseHMDA LoansManufactured homesRefinancingsTemporary loans
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TERMS & DEFINITIONS
APPLICATION . . .
Oral or written request for loan
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TERMS & DEFINITIONS
DWELLING . . .Residential Structure
• Even if not attached to real property• Not limited to 1-to-4 family• Not limited to personal/principal residence
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TERMS & DEFINITIONS
“DWELLING” INCLUDES . . .Condo unitManufactured homeVacation homeRental propertyApartment buildingVacant residential structure
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EXCLUDES
RECREATIONAL VEHICLES (BOATS AND CAMPERS)
TRANSITORY RESIDENCES (HOTELS/HOSPITALS/DORMATORIES)
TERMS & DEFINITIONS
HOME IMPROVEMENT . . .ImprovingRepairingRehabilitatingRemodeling
All or part of a dwelling38
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TERMS & DEFINITIONS
“HOME IMPROVEMENT” includes . . .
Improvements to the real property on which a dwelling is located:
• Swimming pool• Building a garage• Landscaping
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TERMS & DEFINITIONS
HOME IMPROVEMENT- Dual-use property
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APARTMENTS(DWELLINGS)
BUSINESS
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TERMS & DEFINITIONS
HOME IMPROVEMENT- Dual-use property
If proceeds are used primarily to improve the residential portion . . . reportable home improvement loan.
Use any reasonable standard: Percentage of loan proceeds Square footage Income generated
Case-by-case determination41
TERMS & DEFINITIONS
HOME PURCHASE - Dual-use property
If purchased building is primarily residential . . . reportable home-purchase loan.
Use any reasonable standard Square footage Income generated
Case-by-case determination 42
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TERMS & DEFINITIONS
HOME PURCHASE - Loan to purchase farm
Loan to purchase farm is exempt• Even if dwelling is located on farm
Exemption limited to purchase• Home improvement loan is reportable• Refinancing is reportable
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TERMS & DEFINITIONS
HOME PURCHASE - Two loans
Each loan is separate home-purchase loan
Each loan is subject to HMDA
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TERMS & DEFINITIONS
HMDA LOANS – Applications
HMDA covers applications - even if not resulting in a loan
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TERMS & DEFINITIONS
MANUFACTURED HOMEFactory-built home ready for occupancy
upon leaving factory
If requires construction at building site, not a “manufactured home.”
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TERMS & DEFINITIONS
REFINANCING
Old and new loan both secured by dwelling
Regardless of purpose!
Includes other lender refinancings 47
TERMS & DEFINITIONS
REFINANCING - Temporary loan
When a temporary loan is refinanced with another temporary loan, it remains a temporary loan
Remains exempt from HMDA
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TERMS & DEFINITIONS
REFINANCING -Refinancings/renewals
Includes both refinancings and renewals
“Refinancing” does not include: Extensions Deferrals Modifications
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CREDIT UNION RESPONSIBILITIES
PAGE 13
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COLLECT MONITORING DATA
Collect monitoring data Ethnicity Race Sex
Natural persons only (not corporations, partnerships, trusts)
Typical monitoring block on page 1351
COLLECT MONITORING DATA
ON ALL APPLICATIONS . . .
Ask for data (cannot require)
Inform applicant . . .Federal government requests data to monitor laws prohibiting discrimination 52
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COLLECT MONITORING DATA
IN-PERSON APPLICATIONS . . .
Inform applicant . . .If applicant does not provide data, lender must note the data on the basis of sight or surname
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COLLECT MONITORING DATA
MAIL/PHONE - Data not provided
Data need not be provided
Lender must indicate that application was received by mail or phone
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COLLECT MONITORING DATA
MULTIPLE RACIAL DESIGNATIONS
Lender must offer applicant option of selecting one or more racial designations
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COLLECT MONITORING DATA
INADVERTENT COLLECTION OF DATA
Cross through data
Write “not used for this purpose” across monitoring block
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GATHER HMDA DATA
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Monitoring dataLoan numberApplication dateLoan typeProperty typePurpose of loanOwner occupancyLoan amountPreapprovalAction taken
Date of action takenProperty locationIncomeReasons for denialRate spreadHOEPA statusWhether loan was sold
GATHER HMDA DATA
Lender/loan processors collect information . . . usually on a worksheet
Deliver worksheet to person who enters the information into the computerized Loan Application Register (LAR)
Our worksheet – page 31
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PROPOSED REVISIONS
CFPB has proposed changes - not yet final
Expect to report:• Age of applicant• Points and fees• Debt-to-income ratio• Property value• Loan term• Introductory interest rate• Credit score• Interest rate• Total discount points
Lenders exempt if less than 25 mortgages per year59
REPORT HMDA DATAData is reported on computerized LAR
Enter information by code
Appendix A contains LAR instructions
Appendix B has instructions for monitoring data
See pages 16 – 23 for detailed information from:• Appendix A• Appendix B• Reg C Commentary
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LAR TIMING REQUIREMENTS
Enter info into LAR within 30 days after end of calendar quarter in which final action was taken
Electronically submit LAR to regulatory agency by March 1 following the calendar year in which the data was compiled
Retain copy 3 years
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REQUIRED DISCLOSURES
PAGE 1562
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REQUIRED DISCLOSURES
1. FFIEC DISCLOSURE STATEMENT
From submitted data Make available 3 business days after receipt
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In 10 days, make available at branches in other MSAs, or
Post address for written requests (use notice)63
REQUIRED DISCLOSURES
2. MODIFIED LARMake available to the public
Remove:• Application/loan number• Application date• Date action was taken (loan date)
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REQUIRED DISCLOSURES
3. NOTICE OF AVAILABILITY
Post notice in: Lobby of home office Each branch located in an MSA
From regulator . . . or make your own
Model wording – page 1565
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Total Training [email protected]‐800‐831‐0678CUWebinars.comttsTrain.com
Anne [email protected] ext. 4
2015 Webinars
• January 7 - Opening Business Accounts for Credit Unions
• January 12 - Appraisals and Evaluations - The Federal Guidelines
• February 5 - 10 Lessons Learned When Your Member Dies
• February 10 - Lending Compliance 101
• March 5 - Opening Trust Accounts, Estates and Fiduciary Accounts
• April 8 - Best Ever Compliance Checklist for Consumer Loans
• June 3 - Handling Powers of Attorney
• June 10 - New Share Member Account Interview - CIP, CDD and Legal Issues
