Chapter 3 HMDA

Question 1

Home Mortgage Disclosure Act (HMDA, Reg C)

Answer 1

Created in 1975 to track information to prevent discrimination. Requires institutions to collect and report data to be analyzed to detect and prevent discrimination.

Data is used to ensure compliance with ECOA, FHA, and other anti-discrimination laws. Data is also used to prevent redlining, reverse redlining, blockbusting, etc.

Disclosures include; Monitoring statement on 1003

Question 2

Community Reinvestment Act of 197

Answer 2

Requires lenders to meet lending needs within their community. HMDA data is used for this.

Question 3

Who should report under HMDA?

Answer 3

-Any institution that originated at least 25 covered closed-end mortgage loans in each of the preceding 2 calendar years

-Or at least 500 covered open-end lines of credit in each of the preceding 2 calendar ears and it meets other coverage requirements.

Question 4

Which transactions are not reported under HUMDA?

Answer 4

-Loans originated or purchased by the institution acting as a trustee or in some other fiduciary capacity
-Vacant land loans
-Temporary financing
-Purchase of an interest in a pool of loans
-Purchase of servicing rights
-Loans acquired as part of a merger or acquisition of another company or branch

Question 5

Reportable Data under HMDA

Answer 5

-Loan purpose
-Loan type/program
-Property type
-Occupancy type
-Term
-Units
-Loan amount
-Value
-LTV, CLTV
-Lien status
-Event dates
-AUS type
-Rate
-Pricing
-Rate spread
-Discount points
-Lender credits
-Origination fees
-Total costs
-HOEPA 32/35
-PPP
-Census tract
-street/city/state
-zip code/county
-credit score
-DTI
-income
-Denial reason
-Action taken
-age
-sex
-ethnicity
-race
-company NMLS#
-MLO NMLS #

Question 6

When is the HMDA report due to the regulating body?

Answer 6

March 1st of every year

Question 7

Fair Housing Act of 1988

Answer 7

Amended the Fair Housing Act of 1968. Unlike ECOA which is just for creditors, FHA applies to all parties of the transactions, such as title companies and appraisers.

-Adds disability and excludes age in protected classes.
-Requires Equal Housing Lender and Equal Housing Opportunity logos to be displayed in advertising and places of business.

Question 8

Electronic Signatures in Global and National Commerce Act (E-Sign Act)

Answer 8

Created in 2000, allows for electronic signatures on mortgage documents with the permission of the borrower. Also allows electronic records to satisfy federal statute.

Requires permission from the borrower and a disclosure explaining their rights to obtain any record in a non-electronic form and the right to withdraw consent to use electronic records.

Question 9

Homeowner’s Protection Act (Private Mortgage Insurance Cancellation Act or HPA)

Answer 9

Enacted in 1999. Regulates when PMI is removed.

-When the borrower has at least 20% equity in their home and had paid down the mortgage balance to 80% (at option of the lender)

or

-When the balance owed drops to 78% the lender/servicer is required to remove PMI