Do you know about HMDA reporting requirements? You must get on top of this if you own a home or pay your taxes in America. HDMA reporting can be complicated. But like anything, once you’ve figured it out once it gets a lot easier. 

Just three months before the March 2019 filing deadline, the Consumer Financial Protection Bureau did not wait long to announce that it would disclose public data provided by financial institutions under the Home Mortgage Disclosure Act (HMDA) to protect important information.

The new HMDA Act requires, financial institutions to inform the public if they have received data from the CFPB’s website. HMDA requires lenders to report information about loan applications and property applicants.     

Financial Instiutions  

Financial institutions are required under (HMDA) to keep reports that reveal loan-level information on secured loan applications. HMDA requires most lenders to gather and report information about loan applications that they receive. As well as loans they receive, and loans they buy from other lenders.

Remember independent HMDA audits are something you also need to look out for. 

Under HMDA, the Implementing Regulation (C) requires institutions liable to the laws and regulations of HMDA. First to the reporting agency and second to collect certain applications.     

Monitor Geographic Objectives  

In general, the main purpose of the Mortgage Disclosure Act (Regulation C) is to monitor the geographic objectives of lenders. iI’s also to help forge a way to identify predatory and discriminatory lending practices. You can report statistics on the mortgage market to the government.

There are some compliance resources to help financial institutions understand HMDA requirements. These include data collection and reporting requirements.

The Helpdesk has hosted two external stakeholder conferences. This allows conference participants to engage with experts from the Office on regulatory and compliance issues. These are all related to HMDA Regulation C, HMDA Regulation C-43, and EcoA Regulation B.

Raising The Threshold 

In April 2020, the CFPB adopted a final rule. This was to raise the thresholds for obtaining and reporting mortgage loans by the HMDA from 25% to 100% of loans by July 1 of 2020.

Reporting through HMDA enables regulators to analyze information on mortgage lending. As well as trends in mortgage lending in several categories. These include:

  • Amount of pre-authorizations granted,
  • Amount of mortgages granted,
  • Amount borrowed,
  • The purpose of individual loans.

Institutional thresholds are defined as mandatory reporting based on the origin of loans. This is one of the criteria that determines whether you need to report HMDA data. Federal Regulation C requires lenders to put up posters in branches and lobbies to provide information about their unique HMDA statistics upon request.     

Possible Credit Union Exemptions 

A-s.2155 offers banks and credit unions a little bit of an exemption of reporting. HMDA data points to closed mortgage loans for institutions that have fewer than 500 closed mortgage loans and open credit lines for those institutions in the previous two calendar years.

Credit unions subject to HMDA and entitled to the partial exemption are required to collect and report at least 22 non-exempt data points per transaction, regardless of whether the exemption applies.

If in any of the preceding two calendar years an institution has closed or unsecured 500 new-year lines of credit. Is this less than 25% of the mortgage loans? Then the institution is not required to report HMMA data.     

For instance, an institution reporting over 500 closed HMDA loans and 100 open loans would have to report the former. However, they should be excluded from reporting the latter.

What about institutions that submitted fewer than 60,000 covered loan applications in the previous calendar year? They must file their previous years with their top federal regulator by March.

As mentioned in Note 27, the Federal Reserve Bureau has relaxed enforcement of quarterly reporting requirements. If an institution benefits from the increased thresholds before 1 March 2021, it must include all the data for the calendar year 2020.     

The final rule to raise the cover threshold for financial institutions reporting data to HMDA raises the permanent threshold for collecting, collecting, and reporting data on closed mortgage loans from 25% to 100% of all loans by 1 July 2020.

Open Credit Volumes  

What about institutions with open credit volumes of over 200% of the original credit lines? Especially ones that do not currently collect HMDA data on open credit line information? They may want to start implementing this process in the calendar year 2021.

Regulation C-12 (CFR SS 10034 (a) (26) requires financial institutions to indicate the following information in the event of an application:

  • The number of months following the proposed number of months
  • the first date of the interest rate change
  • The opening date of an account.     

For general information on data points for the implementation period, see Section 525 of the compliance guide. Exempted institutions must report all 110 data fields that apply to your institution. With the option to report only the required data following the Exemption Code.

This increase reduces the number of retail investors. This makes less than 100 reportable closed HMDA loans.     

Significant errors in the reporting of mortgage application data may violate HMDA Regulation C. Significant errors in the reporting of mortgage application data may constitute a violation of the Consumer Protection Act. 

HMDA Reporting Requirements Are Changing: Do Your Research

HMDA reporting requirements are changing. You have to give yourself time to research how they affect you before you make any decisions.

You could consult your local government branch and a good lawyer to help you figure out what you need to know.

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