HMDA/Reg C

Question 1

What is the primary purpose of HMDA?

Answer 1

It’s an application/information reporting regulation, around certain types of loans (mortgage loans), in order for examiners and the like to determine whether there might be any fair lending issues.

Question 2

How is a “reportable application” defined under the HMDA rules?

Answer 2

Generally, it’s an oral or written request for a consumer- or business-purpose, closed- or open-end loan that’s secured by a lien on a dwelling. The loan purpose for a commercial loan must be for home purchase, refi or home improvement in order to be HMDA reportable.

Question 3

What is considered a home improvement loan transaction under HMDA?

Answer 3

Any closed-end mortgage or open-end line of credit that is used in whole or in part to repair, rehab, remodel or improve a dwelling or the real property on which the dwelling is located

Question 4

What is considered a home purchase loan transaction under HMDA?

Answer 4

Any closed-end mortgage loan or an open-end line of credit that is used in whole or in part to purchase a dwelling

Question 5

What is considered a refinance transaction under HMDA?

Answer 5

A closed-end mortgage loan or an open-end line of credit in which a new, dwelling-secured debt obligation satisfies and replaces an existing, dwelling-secured debt obligation by the same borrower

Question 6

Generally, what transactions can be considered covered loans and are HMDA reportable?

Answer 6

1. Any dwelling secured credit transaction, whether it’s a closed-end mortgage loan or an open-end line of credit
2. NY State supplemental mortgage CEMAs (consolidation, extension, modification agreement)
3. Applications for preapproval of home purchase loans if the FI issues a written commitment for a designated period of time to extend a home purchase loan up to a specified amount.
4. Loan assumptions (successor-in-interest)

Question 7

Which types of applications are not reportable under HMDA rules?

Answer 7

• Temporary financing (repayment/replaced with permanent financing)
• Agricultural (primary purpose) loans (regardless of a dwelling)
• Counteroffer not accepted (will report original amount and/or terms applied for)
• Counteroffer accepted (will report countered amount and/or terms approved for)

Question 8

For HMDA reporting on the LAR, how is a loan status of “Loan Originated” defined?

Answer 8

A loan status of ‘originated’ is reported if a credit decision approving the application before closing or account opening and that credit decision results in an extension of credit (same is true for a preapproval that results in loan originated)

Question 9

For HMDA reporting on the LAR, how is a loan status of “Loan Purchased” defined?

Answer 9

Reported if a covered loan was purchased by the financial institution after closing or account opening and the financial institution did not make the credit decision, OR, when the financial institution did make a credit decision but repurchased the loan from another entity that the loan was sold to

Question 10

For HMDA reporting on the LAR, how is loan status of “Application Approved Not Accepted” defined?

Answer 10

Approved Not Accepted is reported when the financial institution made a credit decision approving the application before closing or account opening, subject solely to standard outstanding closing conditions but the applicant failed to respond to the approval or the loan was not consummated

Question 11

For HMDA reporting on the LAR, how is loan status of “Application Denied” defined?

Answer 11

This is reported when a financial institution makes a credit decision denying the application before the applicant withdraws or the file is closed for incompleteness

Question 12

For HMDA reporting on the LAR, how is loan status of “Application Withdrawn” defined?

Answer 12

This is reported when the application is expressly withdrawn by the applicant before the financial institution makes a credit decision. Application withdrawn is also reported if the financial institution provides a conditional approval specifying underwriting or creditworthiness conditions and the application is expressly withdrawn by the applicant before the applicant satisfies them

Question 13

For HMDA reporting on the LAR, how is loan status of “File Closed for Incompleteness” defined?

Answer 13

A file is “closed for incompleteness” if the financial institution sent a written notice of incompleteness and the applicant did not respond to the request for additional information within the period of time specified in the notice before the applicant satisfies all underwriting or creditworthiness conditions. If a financial institution then provides a notification of adverse action on the basis of incompleteness, it may report the action taken as either file closed for incompleteness or application denied.

Question 14

For HMDA reporting on the LAR, how is loan status of “Preapproval request denied” defined?

Answer 14

A financial institution reports that the preapproval request was denied if the application was a request for a preapproval under a preapproval program and the institution made a credit decision denying the preapproval request.

Question 15

For HMDA reporting on the LAR, how is loan status of “Preapproval request approved but not accepted” defined?

Answer 15

This status is reported if the application was a request for a preapproval under a preapproval program and the institution made a credit decision approving the preapproval request but the application did not result in a covered loan originated by the financial institution.