By: Gina Ellis
No doubt, by now you have reviewed your HMDA LAR more than once and are ready to submit. However, stop and consider the following points one more time to make sure all your information is correct and makes sense for your institution. March 1st falls on Sunday in 2015, but don’t wait until the last minute; schedule your submission early!
- Are you correctly reporting the action taken as approved, not accepted, when a credit decision has been made? An application can only be reported as withdrawn when expressly withdrawn by the applicant before a credit decision is made. If you have a credit memo in the file dated and documented as approved by your committee or loan officer prior to documentation of an applicant’s withdrawal, this should be reported as approved not accepted.
- Are you correctly reporting government monitoring information? It is more common for applications to be submitted via the Internet without a face-to-face interview these days. When the applicant does not complete the government monitoring information or indicates they do not wish to provide it, the appropriate codes indicating the information was not provided by the applicant should be reported. Train your loan officers to document how the application was received and take appropriate action to obtain monitoring information only in appropriate situations.
- Are you reporting the government monitoring information correctly for a co-applicant? Most of your commercial transactions will be reported with codes indicating no co-applicant. However, if you have a natural person as a co-applicant, you should be obtaining and reporting those as indicated.
- Are you reporting income correctly? You are required to report the gross annual income relied on in the credit decision. For consumer transactions, this should be the gross annual income used in your ability to repay calculations. According to the FFIEC’s “Guide to HMDA Reporting, Getting It Right,” the only time it is appropriate to report this as not applicable (NA) is:
- When your institution does not take the applicant’s income into account
- The loan is for a multi-family dwelling
- The transaction is a loan purchase and you choose not to collect the information
- The transaction is a loan to or an application from an employee
- The borrower or applicant is a corporation, partnership or other entity that is not a natural person
- Are you reporting rate spread and HOEPA status only on consumer transactions? Rate spread and HOEPA status are only applicable for consumer transactions subject to Regulation Z. If your transaction is not consumer purpose subject to Regulation Z, you will report these as not applicable (NA).