HMDA Flashcards
What is a home purchase loan as defined by HMDA?
Loans secured by and made for the purpose of purchasing a dwelling (including condos, mobile homes, coops, single & multi-family dwellings)
What is a home improvement loan as defined by HMDA?
A loan secured by a lien on a dwelling that is for the purpose, in whole or in part, of repairing, rehabilitating, remodeling or improving a dwelling or the real property on which it is located AND other loans (secured or unsecured) for the purpose of home improvement that are classified by the financial institution as home improvement loans.
What is a refinanced loan as defined by HMDA?
Any dwelling-secured loan that replaces and satisfies another dwelling-secured loan. The purpose of the original loan is irrelevant.
Must HELOCs be reported for HMDA purposes?
HELOCs may be reported at the institution’s option if they are made for the purpose of home purchase or improvement – but report only the portion of the loan that represents the covered purpose.
Must pre-approvals for home purchases be reported for HMDA purposes?
Yes, if the institution issues a written commitment to the applicant, valid for a designated period of time to extend a home purchase loan up to a specified amount. If a mortgage lender maintains a preapproval program under HMDA, the lender must report preapprovals that are (i) denied or (ii) approved but not accepted. A preapproval program for HMDA purposes involves requests for preapprovals for home purchase loans (other than open-end lines of credit, reverse mortgages, or loans secured by multifamily dwellings) whereby, after comprehensive analyses of applicants’ creditworthiness (including verification of income, resources, etc.), the lender issues written commitments valid for designated periods of time and up to specified loan amounts. The written commitments may not be subject to conditions other than the following: (i) Conditions that require the identification of a suitable property;
(ii) Conditions that require that no material change has occurred in the applicant’s financial condition or creditworthiness prior to closing; and
(iii) Limited conditions, such as requiring acceptable title insurance binder or a certificate of clear termite inspection, that are not related to the financial condition or creditworthiness of the applicant that the financial institution ordinarily attaches to a traditional home mortgage application.
What does the term “dwelling” include under HMDA?
Residential structure, whether or not it is attached to real property. This includes Condos, mobile and manufactured homes, coops, single & multi-family dwellings.
Under HMDA, lenders must collect data regarding applications for _______ and _______ of home purchase loans, home improvement loans, and refinancings for each calendar year including those collected by electronic means.
Originations and purchases
Applications for preapprovals for home purchase loans that are denied or results in origination ____ be reported.
must
HMDA data may be collected on separate registers for different _____ or _____ _____.
branches
loan types
HMDA data must be submitted to the supervisory agency in one complete package with an ____ _____ of accuracy.
officer certification
T/F: National banks and savings institutions have the option of reporting the reason for denial on the HMDA LAR.
F. They must report this. It’s optional for all other financial institutions.
Which of the following institutions is NOT subject to the coverage of HMDA?
- Bank A, with assets of $55 million and located in a large urban city, makes home improvement loans and some home purchase loans to existing customers, but no mortgage loans.
- Bank B, with assets of $20 million and located in a rural area, has several branches, also in rural areas, including one that makes home improvement and home purchase loans.
- Mortgage Company C, with assets of $75 million and a home office in a large East Coast city, makes exclusively home purchase loans.
a. All the institutions are subject to HMDA
b. Bank A
c. Bank B
d. Mortgage Company C.
c. Bank B
Banks must have assets of greater than $44 million in the preceding calendar year, have an officer or a branch in a metropolitan area (MA) and make at least one home purchase loan secured by a lien on a dwelling. Mortgage companies must have assets of $10 million or more in the preceding calendar year, have an office in a MA, and have at least 10% of their loan volume in home purchase loans or have originated HMDA-covered loans of at least $25 million. Therefore, Bank B’s asset size exempts it from HMDA coverage.
Several types of loan-related data appear in the following list. Which type of data is NOT required to be reported under HMDA?
a. Data on multifamily housing
b. Data on unsecured home improvement loans
c. Data on refinancings of home purchase loans
d. Data on loans to purchase residential lots
d. Data on loans to purchase residential lots
Loans on unimproved land are not covered by the regulation. Unsecured home improvement loans may be reported if the institution classifies them as home improvement loans. If they are not classified as home improvement loans, they do not have to be reported.
Of the following types of data, which one is NOT required to be reported for each application for an originated loan subject to Regulation C?
a. Purpose of the loan
b. Race, ethnicity, and sex of the applicant
c. Type of action taken and the date
d. The interest rate on the loan
d. The interest rate on the loan
Lenders do not have to report the interest rate on HMDA-reportable loans. The rate spread is required to be reported, but not the interest rate itself.
The following statements make assertions about the collection and reporting of data on race, ethnicity, sex and income. Which statement is false?
a. It must be requested on all HMDA-reportable applications received in person from natural persons.
b. It must be requested only for the loans where the application is taken in person.
c. It must be reported unless the loan was purchased
d. It must be requested verbally on telephone applications.
b. It must be requested only for the loans where the application is taken in person.
The info on race, ethnicity, sex and income must be requested on all HMDA-related applications, even those received by telephone, mail or Internet. It does not have to be reported if the borrower fails to supply the information in an application that is not taken in a face-to-face interview. The institution does not have to report this information on purchased loans.
First National is subject to HMDA, On which of these loans does First National have to report the interest rate spread on its HMDA LAR?
a. A loan to remodel a 60-unit apartment complex.
b. A loan to renovate a rental property
c. An unsecured loan to purchase an investment property
d. A home improvement loan secured by a principal dwelling
d. A home improvement loan secured by a principal dwelling
The interest rate spread is only reported on loans subject to TILA.
By what date must financial institutions submit their loan application registers to their federal supervisory agency?
a. March 31 of the year following the calendar year for which the data were compiled.
b. March 1 of the year following the calendar year for which the data were compiled.
c. February 1 of the year following the calendar year for which the data were compiled.
d. April 1 of the year following the calendar year for which the data were compiled.
b. March 1 of the year following the calendar year for which the data were compiled.
First National is subject to HMDA, which of the following loans would First National report on its LAR?
a. A refinancing of the balance of a home purchase loan made 5 years earlier, both loans will be secured by dwellings.
b. A loan made to a couple, secured by their home, to pay for their children’s education.
c. A bridge loan made to a newly transferred executive of a local company
d. A loan made to construct a principal dwelling.
a. A refinancing of the balance of a home purchase loan made 5 years earlier, both loans will be secured by dwellings.
Refinancings of home purchase loans when both loans are secured by dwellings are covered by the regulation. New loans made for purposes other than home improvement, home purchase and refinancings are not covered even if they are secured by real estate. Temporary loans, such as bridge loans and construction loans, are not covered.
When must a bank provide its mortgage loan disclosure statement?
a. Only when requested by its federal supervisory agency
b. At any time when requested by a member of the public
c. For 30 days following receipt of a request from its supervisory agency
d. On an ongoing basis, by posting it in the lobby of each branch.
b. At any time when requested by a member of the public
The mortgage loan disclosure statement must be made available to the public no later than 3 days after its receipt from the FFIEC, and the statement must be available for 5 years. The bank must post a notice of the public’s right to see the statement in the lobby of each office located within a MA.
What information must be on the LAR for home loans on property located within the bank’s metropolitan area?
a. The county, census tract, and metropolitan area of the property
b. The address, census tract, and metropolitan area of the property
c. The county, address, and FMV of the property
d. The name, address and metropolitan area of the applicant.
a. The county, census tract, and metropolitan area of the property
How must most banks submit LAR to their federal supervisory agencies?
a. In machine-readable format
b. On the standard LAR form
c. In 3 copies with the required transmittal
d. In a separate package for each branch loan application
a. In machine-readable format
Banks with more than 25 LAR entries are required to submit electronically. Otherwise, two hard copies must be sent with the transmittal letter.
Which of the following is required to be reported on ABC Bank’s HMDA LAR?
a. An application from Mr. Welch for a preapproval of a home purchase loan application that is approved by ABC in writing but not accepted by Mr. Welch
b. An application from Ms. Ensley for a preapproval of a temporary construction loan that is denied by ABC
c. An application from Mr. and Mrs. Rawlings for a preapproval of a home purchase loan application that is denied by ABC
d. An application from Ms. Connor for the HELOAN to be used to consolidate credit cards.
c. An application from Mr. and Mrs. Rawlings for a preapproval of a home purchase loan application that is denied by ABC
Applications for preapprovals for home purchase loans must be reported if they are denied or if the loans are granted. Applications for preapprovals that are approved but not accepted are reportable at the institution’s option. Applications for nonreportable loans (the interim construction loan in (b) and the HELOAN for a non-HMDA purpose) are never reported.
John and Elise Fernandez apply to ABC Bank for a loan to purchase a manufactured home. ABC Bank is a community bank with approximately $100 million in assets and the home would be located outside of the bank’s metropolitan area. Mr. and Mrs. Fernandez complete an in-person application for a mobile home that is denied by the bank due to insufficient income. Which piece of information on the Fernandez application is ABC Bank NOT required to report on its HMDA LAR?
a. The ethnicity of the applicants
b. The race of the applicants
c. The purpose of the loan application
d. The metropolitan area where the home will be located.
d. The metropolitan area where the home will be located.
Because ABC does not have an office in the metropolitan area where the property is located, it does not have to report the property information on its LAR. It may do so at its option. All other info is required.
Which of the following loans or applications is EXCLUDED from HMDA reporting?
a. Residential loans purchased on the secondary market
b. Loans secured by real estate that are made for purposes other than home purchase, improvement or refinancing
c. Loans on residential property in a flood zone when proof of flood insurance is not provided
d. Applications for refinancing when there is no increase in principal.
b. Loans secured by real estate that are made for purposes other than home purchase, improvement or refinancing.
Only the types of loans mentioned in the “loans covered” and “compilation of loan data” section s are included in the coverage of HMDA - home purchase, home improvement or refinancing. Loans made for other purposes are not reportable.
