Home Mortgage Disclosure Act. with Anne Lolley. / X4

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1 TOTAL TRAINING SOLUTIONS SPECIAL CREDIT UNION WEBINAR HMDA Home Mortgage Disclosure Act with Anne Lolley DECEMBER 2014 / X4 Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

2 TABLE OF CONTENTS BACKGROUND AND APPLICABILITY Background... 4 Supplemental Information... 4 Which Financial Institutions Must Report... 4 Determining the Metropolitan Statistical Areas... 4 HMDA Requirements... 5 HMDA Loans and Exemptions [A Graphic]... 5 HMDA APPLICABILITY CHEAT SHEET... 6 HMDA LOAN TYPES Business Purpose Loans... 7 Loans Not Secured by Real Estate... 7 Home Equity Lines of Credit... 7 Temporary Loans [Construction and Bridge Loans]... 7 Purchase And Rehab Loans... 8 Preapprovals and Prequalifications... 8 Categorizing Dual Purpose Loans... 9 Reporting Multiple Property Loans... 9 HMDA TERMS AND DEFINITIONS Application Dwelling Home Improvement Home Purchase HMDA Loan Manufactured Home Refinancing Temporary Loan CREEDIT UNION RESPONSIBILITIES Collect the Monitoring Data Gather All Required Data and Convert Data to Codes Proposed Revisions Enter Data into the Official Computerized LAR Make the FFIEC Disclosure Statement Available Make Modified LAR Available Post Notice of Availability Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

3 LAR CODES AND INSTRUCTIONS Application or Loan Number Application Date Loan Type Property Type Purpose of Loan Owner Occupancy Loan Amount Preapproval (Home Purchase Loans Only) Action Taken Date of Action Taken Property Location Ethnicity Race Sex Income Reasons for Denial Rate Spread HOEPA Status Lien Status Loan Sold FFIEC S FREQUENTLY ASKED QUESTIONS ANNE S AUDIT NOTES HMDA WORKSHEET GOVERNMENT MONITORING FORM Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

4 BACKGROUND The Congressional Act. The acronym HMDA is short for the Home Mortgage Disclosure Act, a federal law created by Congress in Prior to the passage of this act, it was difficult to obtain financing for housing located in inner city areas. Many felt that this difficulty contributed to the decline of those neighborhoods. In an attempt to encourage lenders to reconsider their narrow lending practices, Congress created HMDA. HMDA contains no specific lending requirements, but rather it requires HMDA institutions to compile and submit data which must be retained for both public and regulatory review. Originally the act established just temporary HMDA requirements and the act was set to lapse at the end of a five year period. The act was extended several times, and ultimately made permanent. The Fed s Regulation C. The actual act reflects Congressional intent in broad directions and requirements. As part of the act, Congress specifically directed the Federal Reserve Board to implement and explain the act by preparing detailed rules and instructions for HMDA reporting institutions. To carry out this charge, the Fed created both Regulation C and its explanatory companion, the Regulation C Commentary. In 2011, the Dodd Frank Act transferred both the regulation and its commentary to the Consumer Financial Protection Bureau. Both documents are available on the CFPB s website. SUPPLEMENTAL INFORMATION FFIEC s Guide. Several years ago, the Federal Financial Institutions Council (FFIEC) began publishing an easy to read explanatory HMDA booklet called, A Guide to HMDA Reporting Getting It Right! This is an excellent reference book and is updated on an as needed basis. The guide is available on the FFIEC website ( click on HMDA under Consumer Compliance. FFIEC s Website. This well organized and easy to read web site contains just about anything you d ever need to understand and comply with HMDA: Rate spread calculator, definitions, instructions, frequently asked questions and whatnot. Go to FFIEC s Frequently Asked Questions. These helpful questions and answers are available on the FFIEC website, but Anne has reformatted the document for readability (and fewer pages). For your convenience, that reformatted document is printed in this booklet, beginning on page 24. WHICH FINANCIAL INSTITUTIONS MUST REPORT A financial institution is required to comply with HMDA if: On December 31, 2013, it had assets in excess of $43 million [this figure changes annually]; AND On December 31, 2013, it had a home or branch office in a metropolitan area. DETERMINING THE METROPOLITAN STATISTICAL AREAS (MSAS) A lender can determine relevant metropolitan statistical areas by visiting and selecting the appropriate state. In addition, the FFIEC's booklet, A Guide to HMDA Reporting: Getting It Right contains lists of MSAs. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

5 HMDA REQUIREMENTS When a financial institution is subject to HMDA, it must: Collect the required monitoring data when it receives an application for a HMDA loan; Enter certain information into the official, computerized HMDA log (called the Loan Application Register or LAR); Make the FFIEC disclosure statement available to the public; Make the modified LAR available to the public; and Post a notice about the availability of its HMDA data. HMDA LOANS To make a long story short, HMDA requires financial institutions to collect and report loan and applicant information on the following types of loans... but note the two key exemptions shown below: IMPORTANT NOTES ABOUT APPLICABILITY Because most compliance laws apply only to consumer-purpose loans, we tend to ignore compliance issues when handling commercial loans. HMDA, however, applies to all loans, including commercial loans. Similarly, it would be a mistake to dismiss loans that are not secured by real estate... HMDA reporting could be triggered by a manufactured home, regardless of whether it is attached to real property. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

6 THESE THREE TYPES OF LOANS ARE HMDA REPORTABLE... AND DON T FORGET THAT HMDA COVERS BOTH CONSUMER AND COMMERCIAL LOANS. LOAN TYPE HMDA DEFINITION NOTES HOME PURCHASE PURCHASE DWELLING + SECURED BY DWELLING The dwelling being purchased and the dwelling used as security can be different dwellings. HOME IMPROVEMENT IMPROVE DWELLING + CLASSIED AS HOME IMPROVEMENT Loan does not have to be secured by a dwelling. OR IMPROVE DWELLING + SECURED BY DWELLING Loan classification is irrelevant. REFINANCING BOTH OLD AND NEW LOAN SECURED BY DWELLING In the case of a refinancing, the purpose of the loan is irrelevant. A refinancing is the rewriting of any existing loan even a loan originally held by another financial institution. Both loans must be secured by a dwelling, but it is not necessary that they be secured by the same dwelling. If a temporary loan is refinanced into another temporary loan, the loan continues to be categorized as a temporary loan and is exempt from HMDA. If a dwelling secured loan is refinanced by a dwelling secured line of credit, the refinancing is not reportable. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

7 BUSINESS PURPOSE LOANS Because HMDA only applies when a dwelling is somehow involved, we tend jump to the conclusion that it only applies to consumer purpose loans. But HMDA does not contain an exception for business purpose loans. If one of the above applicability rules applies, HMDA is applicable, even if the loan is for business purposes. Here are some examples of business loans in which HMDA would apply: A customer borrows money to purchase a dwelling to re sell for profit and gives the lender a mortgage in that house. Assuming the borrower will not live in that dwelling, the loan is a business purpose loan and will not be subject to Truth in Lending, RESPA and similar consumer compliance rules. But look at the HMDA applicability rules! This is a loan to purchase a dwelling and is secured by a dwelling this loan falls squarely under the definition of a home purchase loan and is subject to HMDA. An applicant wants a loan to buy a dwelling to use as rental property and will give the lender a mortgage in her own house to secure the loan. Although this is a business purpose loan, it clearly falls under the HMDA definition of home purchase it is a loan to purchase a dwelling and the loan is also secured by a dwelling. HMDA is applicable. A customer borrows money to improve a rental property (dwelling) he already owns. This is a business purpose loan... and the proceeds are being used to improve a dwelling. If (i) the lender classifies the loan as home improvement or (ii) that loan is secured by a dwelling, this is a HMDA loan. Four years ago a customer borrowed money to buy a rental property dwelling, giving the lender a mortgage in the rental property. Now, she wants to refinance that loan, but the lender hesitates because the renters have nearly destroyed the rental dwelling. No problem... she ll give the lender a mortgage in her own house, which she happens to own free and clear. This refinancing is under HMDA both old and new loans are secured by a dwelling. LOANS NOT SECURED BY REAL ESTATE Since HMDA clearly deals with dwelling related loans, it s easy to think of HMDA as a law that is only applicable on loans secured by real estate. But that would not be correct. HMDA specifically defines dwelling as any residential structure, regardless of whether that structure is attached to real property. Accordingly, HMDA can apply on non real estate loans. For example, a customer may borrow money to repair and update his manufactured home. The lender takes a security interest in the manufactured home, which is not permanently affixed to real estate, but rather is located in a mobile home park. Under the HMDA rules and definitions, the manufactured home is a dwelling, and because this is (i) a loan to improve a dwelling and (ii) the loan is secured by a dwelling, the loan is a home improvement loan and is subject to HMDA. Be sure to look for this HMDA possibility when documenting non real estate loans involving manufactured homes. HOME EQUITY LINES OF CREDIT It is clear that an institution is not required to report home equity lines of credit made in whole or in part for the purpose of home improvement or home purchase. If an institution does opt to report home equity lines, it must report the disposition of all applications for this type of loan, not just those loans that are originated. TEMPORARY LOANS [CONSTRUCTION AND BRIDGE LOANS] HMDA reporting is clearly not required on temporary financing such as construction only loans or bridge loans. But note that HMDA does cover a home purchase loan if that loan is either (i) a combined construction/permanent loan or (ii) a permanent financing that replaces an earlier temporary loan. [Note: When determining whether HMDA applies, remember that all temporary loans are exempt even if the temporary loan is for a term of two years or more.] Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

8 PURCHASE AND REHAB LOANS This is a loan to purchase and rehabilitate a dwelling. A purchase and rehab loan is not a construction loan because a dwelling can be constructed only once. Nevertheless, a purchase and rehab could depending on how the loan is structured be an exempt temporary loan for HMDA purposes. A purchase and rehab loan can be either consumer purpose (borrower will rehab the dwelling then live there) or business purpose (borrower will rehab a dwelling to ultimately resell or rent). Structured as One Loan. If the purchase and rehab loan is structured as one loan and either (i) secured by a dwelling or (ii) classified as home improvement, HMDA reporting is required. Structured as Two Loans. In some cases, the loan may be handled in two phases: A temporary multiple advance loan (to accommodate the rehab), to be followed by a permanent long term loan. In this case, the first loan is temporary financing and is therefore exempt from HMDA reporting. In either case one loan or two loans one could view the loan as either home purchase or home improvement. For HMDA reporting purposes, however, purchase trumps home improvement (see CATEGORIZING DUAL PURPOSE LOANS below), so the loan will be categorized as home purchase. PREAPPROVALS AND PREQUALIFICATIONS Preapprovals. A request for preapproval can be subject to HMDA reporting requirements, but only if the lender has a formal preapproval program. A written commitment issued under such a program must result from a full review of the creditworthiness of the applicant, including such verification of income, resources, and other matters as is typically done by the lender as part of its normal credit evaluation program. In addition to conditions involving the identification of a suitable property and verification that no material change has occurred in the applicant s financial condition or creditworthiness, the written commitment may be subject only to other conditions (unrelated to the financial condition or creditworthiness of the applicant) that the lender ordinarily attaches to a traditional home mortgage application approval. These conditions are limited to conditions such as requiring an acceptable title insurance binder or a certificate indicating clear termite inspection, and, in the case where the applicant plans to use the proceeds from the sale of the applicant s present home to purchase a new home, a settlement statement showing adequate proceeds from the sale of the present home. Prequalifications. Prequalification is not the same as preapproval. A prequalification is a request by a prospective loan applicant (other than a request for preapproval) for a preliminary determination on whether the prospective applicant would likely qualify for credit under a lender's standard, or for a determination on the amount of credit for which the prospective applicant would likely qualify. Lenders are not required to report prequalification requests, even though these requests may constitute applications under Reg B for the purposes of providing a Notice of Adverse Action. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

9 CATEGORIZING DUAL PURPOSE LOANS It s not uncommon for a loan to have two different purposes. When this occurs, Reg C provides clear instructions as to how that loan should be classified and reported. For clarity and simplicity, those rules are expressed in the following chart: LOAN PURPOSE CLASSIFY AND REPORT LOAN AS PURCHASE + REFINANCING PURCHASE PURCHASE + HOME IMPROVEMENT PURCHASE REFINANCING + HOME IMPROVEMENT HOME IMPROVEMENT REPORTING MULTIPLE PROPERTY LOANS When a loan involves more than one property, Reg C provides these specific guidelines on reporting: LOAN TYPE REPORT THIS PROPERTY HOME IMPROVEMENT Report property being improved. If multiple properties are being improved, the lender can either: (i) Report the location of any one of the properties being improved or (ii) report multiple properties, allocating the loan amount among the properties. HOME PURCHASE Report the property taken as security. If multiple properties are taken as security, report the location of the property being purchased (if just one). If multiple properties are being purchased and secured, the lender can either: (i) Report the location of any one of the properties or (ii) report multiple properties, allocating the loan amount among the properties. REFINANCING Report the property taken as security. If multiple properties are taken as security, the lender can either: (i) Report the location of any one of the properties, or (ii) report multiple properties, allocating the loan amount among the properties. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

10 THE TERM APPLICATION WHAT IT MEANS An application is an oral or written request for a loan made in accordance with the lender s procedures. This date must be clearly determined by the lender and is not necessarily the date the applicant signed the application form. DWELLING For HMDA purposes, a dwelling is a residential structure, regardless of whether that structure is attached to real estate. The term dwelling includes an individual condominium unit, as well as a mobile or manufactured home. Additionally, the definition is not limited to the borrower s principal or other personal residence. Accordingly, the term includes vacation homes and rental properties. And for the purposes of HMDA, the term is not limited to one to four family dwellings. It includes multi family structures, such as apartment buildings. Finally, note that the term dwelling includes residential structures that are vacant, regardless of the period of time they have remained uninhabited. Exclusions. The term dwelling does NOT include (i) recreational vehicles such as boats or campers and (ii) transitory residences such as hotels, hospitals and college dormitories whose occupants have principal residences elsewhere. HOME IMPROVEMENT Improvements. The term home improvement means improving, repairing, rehabilitating or remodeling all or part of a dwelling. In addition, the term includes improvements to the real property on which a dwelling is located, such as installing a swimming pool, landscaping or constructing a garage. Loan that is BOTH Refinancing and Home Improvement. If a loan is both a refinancing and a home improvement loan, the loan must be reported as a home improvement loan. Lender Classification. A lender has classifies a loan as a home improvement loan if it enters the loan on its books as a home improvement loan, or has otherwise coded or identified the loan as a homeimprovement loan. For example, a lender that has booked a loan (or reported it on a call report) as a home improvement loan has classified it as home improvement. Combined Residential and Commercial Property. If the proceeds of a loan are used to improve property used for both residential and commercial purposes (for example, a building containing apartment units and retail space), the loan is a home improvement loan if the proceeds are used primarily to improve the residential portion of the property. If the loan proceeds are used to improve the entire property (to replace the heating system, for example), the loan is a home improvement loan only if the property is primarily residential. A lender may use any reasonable standard to determine the primary use of the property, such as square footage or income generated, and the lender may select the standard on a case by case basis. Reimbursement for Home Improvement. Occasionally, a customer will use ready cash to pay for a home improvement project, then borrow money to reimburse him or herself for the costs. Similarly, a customer might pay for home improvement costs with a credit card then borrow money to pay off the card. In these cases, the purpose of the loan is NOT home improvement, but rather personal expenses (or something similar). Whether a loan is for the purpose of home improvement is determined for the actual, immediate purpose of the loan. In these cases, the home improvement project has been paid the loan is simply to reimburse the customer for the payment. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

11 HOME PURCHASE Two Different Dwellings. A home purchase loan includes a loan secured by one dwelling and used to purchase another dwelling. Combined Residential and Commercial Property. A dwelling secured loan is considered to be a home purchase loan and subject to HMDA if it is used to purchase property used primarily for residential purposes (such as an apartment building containing a convenience store). A blender may use any reasonable standard to determine whether the property is used primarily for residential purposes such as square footage or income generated and that standard can be applied on a caseby case basis. Loan to Purchase Farm. A loan to purchase property used primarily for agricultural purposes is exempt from HMDA even if the property includes a dwelling. A lender may use any reasonable standard to determine the primary use of the property. For example, a lender could refer to the RESPA exemptions and conclude that a loan secured by 25 acres or more is exempt from both RESPA and HMDA. The lender can select a primary purpose standard on a case by case basis. NOTE: This special exemption is limited to the actual purchase of agricultural property. Homeimprovement loans and refinancings involving the dwelling could still be subject to HMDA. Construction and Permanent Financing. A home purchase loan includes both of the following: A combined construction/permanent loan, and A permanent financing that replaces a temporary construction only loan. The term home purchase loan does not include a construction only loan, which is considered temporary financing under HMDA and is not reported. Second Loan to Finance Downpayment. Sometimes, a lender will make two loans to a homebuyer: (i) The usual first loan and (ii) a second loan used to finance all or part of the downpayment. In that case, each loan is a separate home purchase loan subject to HMDA. Loan that is BOTH Home Purchase and Home Improvement. If a loan is a home purchase loan and also a home improvement loan (or a refinancing ), the lender must report the loan as a homepurchase loan. HMDA LOAN From time to time, this reference material may collectively refer to home purchase loans, homeimprovement loans and refinancings collectively as loans or HMDA loans. Understand, however, that these terms don t only apply to loans that are originated they also cover applications and purchases of HMDA loans. MANUFACTURED HOME A manufactured home is a factory built home that is essentially ready for occupancy upon leaving the factory and being transported to a building site. A modular home that is ready for occupancy upon leaving the factory is included in the definition of manufactured home. Other factory built homes, such as panelized and pre cut homes, generally do not fall into the manufactured home category because they require a significant amount of construction on site before they are ready for occupancy. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

12 REFINANCING Definition. For HMDA purposes, a refinancing is a refinancing where both the old and new loans are secured by a dwelling. Refinancing from Another Lender. A refinancing is the rewriting of any existing obligation even a loan originally held by another lender. Same Dwelling Not Required. While both old and new loans must be secured by a dwelling it is not necessary that the two loans be secured by the same dwelling! Refinancing of Temporary Loan. If both old and new loans are temporary loans, the new loan is not reportable as a refinancing. It continues its status as a temporary loan and is exempt from HMDA reporting requirements. Term Includes Both Refinancings and Renewals. For HMDA purposes, the term refinancing includes any transaction in which a prior loan is rewritten. There is no distinction between refinancings and renewals both fall within the term refinancing. Term Does Not Cover Extensions, Deferrals and Modifications. The term refinancing does not include extensions, deferrals and modifications. These transactions are not subject to the HMDA reporting requirements. Term Does Not Cover A Line of Credit. If a dwelling secured loan is refinanced by a dwelling secured line of credit, the transaction is not reportable. TEMPORARY LOAN HMDA reporting is clearly not required on temporary financing such as construction only loans or bridge loans. But note that the following two loans are not exempt under the temporary financing category and are subject to HMDA reporting: A combined construction/permanent loan, or A permanent financing that replaces an earlier temporary loan. Refinancing of Temporary Loan. If a temporary loan is refinanced and continues to be temporary after the refinancing, the new loan is a temporary loan and is exempt from HMDA reporting. It is not reportable as a refinancing even if both old and new loans are secured by dwellings. RESPA Definition Not Applicable. When dealing with RESPA applicability, a temporary loan is a loan that has a term of less than two years. For HMDA purposes, however, the term of the loan is irrelevant any bridge loan or construction loan is considered temporary and is exempt, regardless of the term. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

13 COLLECT THE MONITORING DATA If the applicant is a natural person, the lender must collect data showing the ethnicity, race and sex of both the applicant and the co applicant (if any). We often refer to this as the monitoring data. Preprinted application forms for residential real estate loans (such as the commonly used Uniform Residential Loan Application) usually have a special block (see example below) in which this data can be indicated. INFORMATION FOR GOVERNMENT MONITORING PURPOSES The following information is requested by the Federal Government for certain types of loans related to a dwelling in order to monitor the lender s compliance with equal credit opportunity, fair housing and home mortgage disclosure laws. You are not required to furnish the information, but are encouraged to do so. The law provides that a lender may not discriminate either on the basis of the information, or on whether you choose to furnish it. If you furnish the information, please provide both ethnicity and race. For race, you may check more than one designation. If you do not furnish ethnicity, race, or sex, under Federal regulations, this lender is required to note the information on the basis of visual observation and surname if you have made this application in person. If you do not wish to furnish the information, please check the box below. (Lender must review the above material to assure that the disclosures satisfy all requirements to which the lender is subject under applicable state law for the particular type of loan applied for.) BORROWER I do not wish to furnish this information. CO-BORROWER I do not wish to furnish this information. Ethnicity: Hispanic or Latino Not Hispanic or Latino Ethnicity: Hispanic or Latino Not Hispanic or Latino Race: American Indian or Asian Black or Alaskan Native African American Race: American Indian or Asian Black or Alaskan Native African American Native Hawaiian or Other Pacific Islander White Native Hawaiian or Other Pacific Islander White Sex: Female Male Sex: Female Male To be Completed by Interviewer This application was taken by: Face to face interview Mail Telephone Internet Interviewer s Name (print or type) Interviewer s Signature Interviewer s Phone Number (incl. area code) Name and Address of Interviewer s Employer If the application does not contain the monitoring block, the lender must use a separate monitoring form (sometimes called a supplemental monitoring form). This separate form mirrors the block shown above and can be either designed in house or purchased from forms companies. If the block is prepared in house, make sure it contains a space for the name of the applicant and some way to identify the application/loan, such as a loan number or date. NOTE: Monitoring data will not be collected if the applicant is a non human entity such as a corporation, partnership, limited liability company or trust. HMDA establishes specific requirements for lenders in connection with the collection of the monitoring data. These requirements are set forth below: On all Applications. On any application, regardless of whether the application is taken in person, by mail, by telephone or on the Internet, the lender must: o o Ask the applicant for the monitoring information (but cannot require the applicant to provide the information); and Inform the applicant that the federal government requests this information in order to monitor compliance with federal laws that prohibit lenders from discriminating against applicants on these bases. In Person Applications. If the application is taken in person, the lender must inform the applicant that if the applicant does not provide the monitoring information, the lender is required to note the data on the basis of visual observation or surname. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

14 In Person Applications Information Not Provided by Applicant. If the application is taken in person and the applicant not provide the monitoring information, the lender must note this fact on the form and then note the applicant s ethnicity, race, and sex on the basis of visual observation and surname, to the extent possible. Mail/Telephone/Internet Applications Information Not Provided by Applicant. If the application is taken by mail, telephone or Internet and the applicant declines or fails to answer the monitoring questions, the data need not be provided. The lender must indicate, however, that the application was received by mail, telephone, or Internet (if it is not otherwise evident on the face of the application). Multiple Racial Designations. The lender must offer the applicant the option of selecting one or more racial designations. Inadvertent Collection of Monitoring Data. It is improper to collect monitoring information in connection with an application that is not subject to HMDA. If a loan application contains monitoring information, but is not subject to HMDA, cross through the monitoring information and write NOT USED FOR THIS PURPOSE in or across the monitoring block. GATHER ALL REQUIRED DATA AND CONVERT DATA TO CODES (WHEN NECESSARY) Before the required HMDA data can be inputted into the official, computerized Loan / Application Register (LAR), someone will have to gather up all that data. Required data will include the following data: Monitoring data (ethnicity, race and sex of each applicant) Application or loan number Application date Loan type Property type Purpose of loan Owner occupancy Loan amount Preapproval Action taken Date of action taken Property location Income Reasons for denial Rate spread HOEPA status Lien status Whether loan was sold PROPOSED REVISIONS THE CFPB IS HAS PROPOSED REVISIONS TO THE HMDA REPORTING REQUIREMENTS. THOSE REVISIONS ARE NOT YET FINAL, BUT IN THE FUTURE, EXPECT TO REPORT: AGE OF APPLICANT POINTS AND FEES DEBT TO INCOME RATIO VALUE OF SECURED REAL PROPERTY TERM OF LOAN INTRODUCTORY INTEREST RATE CREDIT SCORE INTEREST RATE TOTAL DISCOUNT POINTS THE PROPOSAL WOULD ALSO EASE REPORTING REQUIREMENTS FOR SMALL INSTITUTIONS INSTITUTIONS WITH LESS THAN 25 MORTGAGES A YEAR WOULD NOT BE REQUIRED TO REPORT HMDA DATA. When this information is actually being entered into the computerized LAR, much of it is reported by code. For example, owner occupancy is entered as Code 1, 2 or 3 to designate one of the following: Code 1 Owner occupied as a principal dwelling Code 2 Not owner occupied Code 3 Not applicable INFORMATION ON ENTERING THE APPROPRIATE CODE BEGINS ON PAGE 16. Typically, the loan assistant will gather the required HMDA data and indicate the appropriate data and codes on an internal form that will later be given to the person who inputs the coded data into the official LAR by computer. The name of this internal data gathering form varies from institution to institution, but will probably be something like, LAR Input Sheet. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

15 ENTER DATA INTO THE OFFICIAL, COMPUTERIZED LAR Once all the required HMDA data is gathered and recorded on the lender s internal LAR Input Sheet, that sheet is given to the person who is responsible for entering that information into the official, computerized LAR. HMDA requires that the data be entered into the official LAR computer log within thirty days after the end of the calendar quarter in which final loan action was taken, and the official LAR must be electronically submitted to the lender s regulatory agency by March 1 following the calendar year in which the data is compiled. The lender must retain a copy for at least three years. MAKE FFIEC DISCLOSURE STATEMENT AVAILABLE Once the lender submits the LAR, the FFIEC will prepare a disclosure statement from the submitted data. The lender must make that disclosure statement available to the public (at its home office) not later than three business days after receiving the statement from the FFIEC. In addition, the lender must do one of the following: Make the FFIEC disclosure available to the public (within ten business days after receiving it) in at least one branch office in each other MSA where the lender has offices. Post the address for sending written requests in the lobby of each branch office in other MSAs where the lender has offices. If the lender selects this option, it must mail or deliver a copy of the disclosure statement within 15 calendar days after receiving a written request. This post the address requirement can be satisfied by including the address in the Notice of Availability discussed below. MAKE MODIFIED LAR AVAILABLE The lender must make its LAR available to the public, but must first remove the application or loan number, the application date and the date action was taken. The modified LAR must be available following the calendar year for which the data was compiled... by March 31 for a request received on or before March 1, and within 30 calendar days for a request received after March 1. POST NOTICE OF AVAILABILITY The lender must post a notice about the availability of its HMDA data in the lobby of its home office and of each branch office located in an MSA. Upon request, the lender must provide the location of the offices whether the statement is available for inspection and copying. Alternatively, it can include that location in the lobby notice. The lender s regulatory agency may provide HMDA posters or the lender can create its own poster. If the lender creates its own poster, the following language is suggested (but not required): HOME MORTGAGE DISCLOSURE ACT NOTICE The HMDA data about our residential mortgage lending are available for review. The data show geographic distribution of loans and applications; ethnicity, race, sex, and income of applicants and borrowers; and information about loan approvals and denials. Inquire at this office regarding the locations where HMDA data may be inspected. If the lender uses the notice to inform the public of the address where a request can be mailed, the notice can include the following sentence: To receive a copy of these data send a written request to. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

16 FROM REG C APPENDICES A & B AND THE REG C COMMENTARY APPLICATION OR LOAN NUMBER Enter an identifying loan number that can be used later to retrieve the loan or application file. It can be any number of the lender's choosing (not exceeding 25 characters). You may use letters, numerals, or a combination of both. A lender must ensure that each identifying number is unique within that institution. If a lender's LAR contains data for branch offices, for example, the lender could use a letter or a numerical code to identify the loans or applications of different branches, or could assign a certain series of numbers to particular branches to avoid duplicate numbers. Lenders are strongly encouraged not to use the applicant s name or social security number, for privacy reasons. APPLICATION DATE Enter the date the applicant asked for the loan by month, day and year. If your institution normally records the date shown on the application form, you may use that date instead. Enter NA for loans purchased by your institution. For paper submissions, use numerals in the form MM/DD/CCYY (for example, 01/15/2006). For submissions in electronic form, the proper format is CCYYMMDD ( ). Lenders are not required to use the same application date approach for its entire HMDA submission, but it should be generally consistent (such as routinely using one approach within a particular division or for a category of loans). For an application forwarded by a broker, a lender may report (i) the date the application was received by the broker, (ii) the date the application was received by the lender, or (iii) the date shown on the application. If, within the same calendar year, an applicant asks a lender to reinstate a counteroffer that the applicant previously did not accept (or asks the lender to reconsider an application that was denied, withdrawn, or closed for incompleteness), the lender may treat that request as the continuation of the earlier transaction or as a new transaction. If the lender treats the request as a new transaction, it reports the date of the request as the application date. LOAN TYPE Codes are self explanatory. 1 Conventional (any loan other than FHA, VA, FSA, or RHS loans) 2 FHA insured (Federal Housing Administration) 3 VA guaranteed (Veterans Administration) 4 FSA/RHS (Farm Service Agency or Rural Housing Service) PROPERTY TYPE a. Use code 1, not code 3, for loans on individual condominium or cooperative units. 1 One to four family (other than manufactured housing) 2 Manufactured housing 3 Multifamily b. If you cannot determine (despite reasonable efforts) whether the loan or application relates to a manufactured home, use code 1. PUPOSE OF LOAN a. Do not report a refinancing if, under the loan agreement, you were unconditionally required to refinance the loan, or you were obligated to refinance the loan subject to conditions within the borrower s control. 1 Home purchase 2 Home improvement 3 Refinancing b. A lender may rely on the oral or written statement of an applicant regarding the proposed use of loan proceeds. For example, a lender could use a check box, or a purpose line, on a loan application to determine whether or not the applicant intends to use loan proceeds for home improvement purposes. c. If a loan is a home purchase loan as well as a home improvement loan, or a refinancing, report the loan as a HOME PURCHASE loan. If a loan is a home improvement loan as well as a refinancing, report the loan as a HOME IMPROVEMENT loan. NOTE: A loan to purchase property used primarily for agricultural purposes is not a home purchase loan even if the property includes a dwelling. An institution may use any reasonable standard to determine the primary use of the property, such as by reference to the exemption from RESPA for a loan on property of 25 acres or more. A lender may select the standard to apply on a case by case basis. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

17 OWNER OCCUPANCY Indicate whether the dwelling is or will be occupied by the owner of the dwelling. a. For purchased loans, use code 1 unless the loan documents or application indicate that the property will not be owner occupied as a principal residence. 1 Owner occupied as a principal dwelling 2 Not owner occupied 3 Not applicable b. Use code 2 for second homes or vacation homes, as well as for rental properties. c. Use code 3 if the property to which the loan relates is a multifamily dwelling; is not located in a metropolitan area; or is located in a metropolitan area in which your institution has neither a home nor a branch office. Alternatively, at your institution s option, you may report the actual occupancy status, using code 1 or 2 as applicable. If a loan relates to multiple properties, the lender reports the owner occupancy status of the property for which is being reported under Location of Property. LOAN AMOUNT Enter the amount of the loan or application. Do not report loans below $500. Show the amount in thousands, rounding to the nearest thousand (round $500 up to the next $1,000). For example, a loan for $167,300 should be entered as 167 and one for $15,500 as 16. a. For a home purchase loan that you originated, enter the principal amount of the loan. b. For a home purchase loan that you purchased, enter the unpaid principal balance of the loan at the time of purchase. c. For a home improvement loan, enter the entire amount of the loan including unpaid finance charges if that is how such loans are recorded on your books even if only a part of the proceeds is intended for home improvement. d. If you opt to report home equity lines of credit, report only the portion of the line intended for home improvement or home purchase. e. For refinancings, indicate the total amount of the refinancing, including both the amount outstanding on the original loan and any amount of new money. f. For a loan application that was denied or withdrawn, enter the amount applied for. g. Except in the case of a home equity line of credit, a lender reports the entire amount of the loan, even if only a part of the proceeds is intended for home purchase or home improvement. h. A lender that enters into a written assumption agreement accepting a new party as the obligor on a loan reports the amount of the outstanding principal on the assumption as the loan amount. If an applicant accepts a counteroffer for an amount different from the amount initially requested, the lender reports the loan amount granted. If an applicant does not accept a counteroffer or fails to respond, the lender reports the loan amount initially requested. PREAPPROVAL Indicate whether the application or loan involved a request for preapproval of a home purchase loan by entering the applicable code. 1 Preapproval was requested 2 Preapproval was not requested 3 Not applicable a. Enter code 2 if your institution has a covered preapproval program but the applicant does not request a preapproval. b. Enter code 3 if your institution does not have a preapproval program. c. Enter code 3 for applications or loans for home improvement or refinancing and for purchased loans. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

18 ACTION TAKEN a. Use code 1 for a loan that is originated, including one resulting from a request for preapproval. b. For a counteroffer (your offer to the applicant to make the loan on different terms or in a different amount from the terms or amount applied for), use code 1 if the applicant accepts. Use code 3 if the applicant turns down the counteroffer or does not respond. 1 Loan originated 2 Application approved but not accepted 3 Application denied by financial institution 4 Application withdrawn by applicant 5 File closed for incompleteness 6 Loan purchased by financial institution 7 Preapproval request denied by financial institution 8 Preapproval request approved but not accepted (optional reporting) c. Use code 2 when the application is approved but the applicant (or the loan broker) fails to respond to your notification or approval or your commitment letter with the specified time. Do not use this code for a preapproval request. d. Use code 4 only when the application is expressly withdrawn by the applicant before a credit decision is made. Do not use code 4 if a request for preapproval is withdrawn; preapproval requests that are withdrawn are not reported under HMDA. e. Use code 5 if you sent a written notice of incompleteness (part of the Notice of Action Taken form) and the applicant did not respond to your request for additional information within the period of time specified in your notice. Do not use this code for requests for preapproval that are incomplete; incomplete preapproval requests are not reported under HMDA. f. If a borrower rescinds a transaction after closing, the lender may report the transaction either as an origination or as an application that was approved but not accepted. g. A lender reports loans that it purchased during the calendar year, and does not report the loans that it declined to purchase. h. If a lender issues a loan approval subject to the applicant s meeting underwriting conditions (other than customary loan commitment or loanclosing conditions, such as a clear title requirement or an acceptable property survey) and the applicant does not meet them, the lender reports the action taken as a denial. DATE OF ACTION TAKEN For paper submissions only, enter the date by month, day, and year, using numerals in the form MM/DD/CCYY (for example, 02/22/2006). For submissions in electronic form, the proper format is CCYYMMDD ( ). a. For loans originated, enter the settlement or closing date. b. For loans purchased, enter the date your lender purchased the loan. c. For applications and preapprovals denied, applications and preapprovals approved but not accepted by the applicant, and files closed for incompleteness, enter the date that the action was taken by your institution or the date the notice was sent to the applicant. d. For applications withdrawn, enter the date you received the applicant s express withdrawal, or enter the date shown on the notification from the applicant, in the case of a written withdrawal. e. For preapprovals that lead to a loan origination, enter the date of the origination. f. For a loan approved by the lender but not accepted by the applicant, the lender reports any reasonable date, such as the approval date, the deadline for accepting the offer, or the date the file was closed. Although a lender need not choose the same approach for its entire HMDA submission, it should be generally consistent within a particular division of the institution or category of loans. g. If a lender acquires loan originations through a broker, the lender can report either the closing date or the date the lender acquired the loan from the broker. If disbursement of funds takes place after the closing date, the lender may use the disbursement date. h. For a combined construction permanent loan, the lender reports either the settlement or closing date, or the date the loan converts to the permanent financing. Although a lender need not choose the same approach for its entire HMDA submission, it should be generally consistent within a particular division of the institution or category of loans. i. A lender does not report any loan application still pending at the end of the calendar year; it reports that application in the year in which final action is taken. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

19 PROPERTY LOCATION Except as otherwise provided, enter the applicable codes for the metropolitan area, state, county, and census tract to indicate the location of the property to which a loan relates. OBTAINING LOCATION DATA Metropolitan area. For each loan or loan application, enter the metropolitan area number. The property location data is determined by Metropolitan area boundaries are defined by OMB; use the boundaries that were in effect accessing the FFIEC's geocoding system at on January 1 of the calendar year for which you are reporting. A listing of metropolitan ffiec.gov and entering the property address. areas is available from your supervisory agency or the FFIEC. State and county. Use the Federal Information Processing Standard (FIPS) two digit numerical code for the state and the three digit numerical code for the county. These codes are available from your supervisory agency or the FFIEC. Note: On December 1, 2014, the FFIEC released a new geocoding system to provide enhanced mapping features and more precise geocodes. For assistance using the new geocoding system, lenders can reference the geocoder s Help function. Census tract. Indicate the census tract where the property is located. Notwithstanding paragraph 6, if the property is located in a county with a population of 30,000 or less in the 2000 census (as determined by the Census Bureau s 2000 CPH 2 population series), enter NA (even if the population has increased above 30,000 since 2000), or enter the census tract number. Census tract number. For the census tract number, consult the U.S. Census Bureau s Census Tract/Street Index for 2000; for addresses not listed in the index, consult the Census Bureau s census tract outline maps. Use the maps from the Census Bureau s 2000 CPH 3 series, or equivalent 2000 census data from the Census Bureau (such as the Census TIGER/Line file) or from a private publisher. Property located outside metropolitan area. For loans on property located outside the metropolitan areas in which a lender has a home or branch office, or for property located outside of any metropolitan area, the lender may choose one of the following two options: Under option one, the lender may enter the metropolitan area, state and county codes and the census tract number; and if the property is not located in any metropolitan area, it may enter NA in the metropolitan area column. (Codes exist for all states and counties and numbers exist for all census tracts.) Under this first option, the codes and census tract number must accurately identify the property location. Under the second option, which is not available if paragraph 6 applies, a lender may enter NA in all four columns, whether or not the codes or numbers exist for the property location. Data reporting for lenders required to report data on small business, small farm, and community development lending under the CRA regulations. If your institution is required to report data under the regulations that implement the CRA, you must enter the property location on your LAR even if the property is outside metropolitan areas in which you have a home or branch office, or is not located in any metropolitan area. Requests for preapproval. Notwithstanding paragraphs 1 through 6 if the application is a request for preapproval that is denied or that is approved but not accepted by the applicant, you may enter NA in all four columns. Multiple properties. For a home improvement loan, a lender reports the property being improved. If more than one property is being improved, the lender reports the location of one of the properties or reports the loan using multiple entries on the LAR (with unique identifiers) and allocating the loan amount among the properties. Multiple properties. For a home purchase loan, a lender reports the property taken as security. If a lender takes more than one property as security, it reports the location of the property being purchased if there is just one. If the loan is to purchase multiple properties and is secured by multiple properties, the lender can either (i) report the location of one of the properties or (ii) report the loan using multiple entries, allocating the loan amount among the properties. Loans purchased from another location. The requirement to report the property location by census tract in a metropolitan area in which the lender has a home or branch office applies not only to loan applications and originations, but also to loans purchased from an institution that did not have a home or branch office in that metropolitan area and did not collect the property location information. Manufactured home. If information about the potential site of a manufactured home is not available, a lender reports using the code for not applicable. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

20 ETHNICITY, RACE AND SEX GENERAL MONITORING INFORMATION 1. Applicability. Report this applicant information for loans that you originate and also for applications that do not result in an origination. a. You need not collect or report this information for loans purchased. If you choose not to, use the codes for not applicable. b. If the applicant is not a natural person (a corporation, partnership, LLC or trust, for example), use the codes for not applicable. 2. Mail, Internet, or telephone applications. All loan applications, including applications taken by mail, Internet, or telephone, must use a monitoring collection form similar to that shown in HMDA S Appendix B regarding ethnicity, race, and sex. For applications taken by telephone, the information must be stated orally by the lender, except for information that pertains uniquely to applications taken in writing. If the applicant does not provide this data in an application taken by mail or telephone or on the Internet, enter the code for information not provided by applicant in mail Internet, or telephone application. 3. A lender reports the monitoring information as provided by the applicant. For example, if an applicant checks the Asian box the lender reports using the Asian code. 4. If an applicant fails to provide the requested information for an application taken in person, the lender reports the data on the basis of visual observation or surname. 5. When an applicant meets in person with a lender to complete an application that was begun by mail, Internet, or telephone, the lender must request the monitoring information. If the meeting occurs after the application process is complete, for example, at closing, the lender is not required to obtain monitoring information. 6. A joint applicant may enter the monitoring information on behalf of an absent joint applicant. If the information is not provided, the lender reports using the code for information not provided by applicant in mail, Internet, or telephone application. 7. A lender that accepts applications through electronic media with a video component treats the applications as taken in person and collects the information about the ethnicity, race, and sex of applicants. A lender that accepts applications through electronic media without a video component (for example, the Internet or facsimile) treats the applications as accepted by mail. ETHNICITY Use these codes to indicate the ethnicity of the applicant or borrower under column A and of any co applicant or coborrower under column CA. a. Use code 4 only when the applicant or co applicant is not a natural person or when applicant or co applicant information is unavailable because the loan has been purchased by your institution. b. If there are no co applicants or co borrowers, use code 5 in the co applicant column. 1 Hispanic or Latino 2 Not Hispanic or Latino 3 Information not provided by applicant in mail, Internet, or telephone application 4 Not applicable 5 No co applicant RACE Use these codes to indicate the race of the applicant or borrower under column A and of any co applicant or coborrower under column CA. a. If an applicant selects more than one racial designation, enter all codes corresponding to the applicant s selections. 1 American Indian or Alaska Native 2 Asian 3 Black or African American 4 Native Hawaiian or Other Pacific Islander 5 White 6 Information not provided by applicant in mail, Internet, or telephone application 7 Not applicable 8 No co applicant b. Use code 7 for not applicable only when the applicant or co applicant is not a natural person or when applicant or co applicant information is unavailable because the loan has been purchased by your institution. c. If there is more than one co applicant, provide the required information only for the first co applicant listed on the application form. If there are no co applicants or co borrowers, use code 8 for no co applicant in the co applicant column. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

21 SEX Use these codes to indicate the sex of the applicant or borrower under column A and of any co applicant or coborrower under column CA. 1 Male 2 Female 3 Information not provided by applicant in mail, Internet, or telephone application 4 Not applicable 5 No co applicant a. Use code 4 for not applicable only when the applicant or co applicant is not a natural person or when applicant or co applicant information is unavailable because the loan has been purchased by your institution. b. If there is more than one co applicant, provide the required information only for the first co applicant listed on the application form. If there are no co applicants or co borrower, use code 5 for no co applicant in the co applicant column. INCOME Enter the gross annual income that your institution relied on in making the credit decision. a. Round all dollar amounts to the nearest thousand (round $500 up to the next $1,000), and show in thousands. For example, report $35,500 as 36. b. For loans on multifamily dwellings, enter NA. c. If no income information is asked for or relied on in the credit decision, enter NA. d. If the applicant or co applicant is not a natural person or the applicant or co applicant information is unavailable because the loan has been purchased by your institution, enter NA. e. A lender reports the gross annual income relied on in evaluating the creditworthiness of applicants. For example, if a lender relies on an applicant s salary to compute a debt to income ratio but also relies on the applicant s annual bonus to evaluate creditworthiness, the lender reports the salary and the bonus to the extent relied upon. Similarly, if a lender relies on the income of a cosigner to evaluate creditworthiness, the lender includes this income to the extent relied upon. But a lender does not include the income of a guarantor who is only secondarily liable. f. If two persons jointly apply for a loan and both list income on the application, but the lender relies only on the income of one applicant in computing ratios and in evaluating creditworthiness, the lender reports only the income relied on. A lender may report NA in the income field for loans to its employees to protect their privacy, even though it relied on their income in making its credit decision. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

22 REASONS FOR DENIAL (OPTIONAL NOT REQUIRED) 1. You may report the reason for denial, and you may indicate up to three reasons, using these codes. Leave this column blank if the action taken on the application is not a denial. For example, do not complete this column if the application was withdrawn or the file was closed for incompleteness. 2. If your institution uses Reg B s model Notice of Adverse Action form, use these codes as follows: Code 1 Income insufficient for amount of credit requested Excessive obligations in relation to income Code 2 Temporary or irregular employment Length of employment Code 3 Insufficient number of credit references provided No credit file Limited credit experience Poor credit performance with us Delinquent past or present obligations with others Garnishment, attachment Foreclosure, repossession Collection action, judgment Bankruptcy Code 4 Value or type of collateral not sufficient Code 6 Unable to verify credit references Unable to verify employment Unable to verify income Unable to verify residence Code 7 Credit application incomplete Code 9 Length or residence Temporary residence Other reason specified on notice 1 Debt to income ratio 2 Employment history 3 Credit history 4 Collateral 5 Insufficient cash (down payment, closing costs) 6 Unverifiable information 7 Credit application incomplete 8 Mortgage insurance denied 9 Other RATE SPREAD a. For a home purchase loan, a refinancing, or a dwelling secured home improvement loan that you originated, report the spread between the annual percentage rate (APR) and the average prime offer rate for a comparable transaction if the spread is equal to or greater than 1.5 percentage points for first lien loans or 3.5 percentage points for subordinate lien loans. To determine whether the rate spread meets this threshold, use the average prime offer rate in effect for the type of transaction as of the date the interest rate was set, and use the APR for the loan as calculated and disclosed to the consumer under Regulation Z. The required rate spread can be easily determined by using the rate spread calculator available on the FFIEC s web site ( b. If the loan is not subject to Reg Z, is a home improvement loan that is not dwelling secured, or is a loan you purchased, enter NA. c. Enter NA in the case of an application that does not result in a loan origination. d. Enter the rate spread to two decimal places, and use a leading zero. For example, enter If the difference between the APR and the average prime offer rate is a figure with more than two decimal places, round the figure or truncate the digits beyond two decimal places. e. If the difference between the APR and the average prime offer rate is less than 1.5 percentage points for a first lien loan and less than 3.5 percentage points for a subordinate lien loan, enter NA. Date the interest rate was set. The relevant date to use to determine the average prime offer rate for a comparable transaction is the date on which the loan's interest rate was set by the financial institution for the final time before closing. If an interest rate is set pursuant to a lock in'' agreement between the lender and the borrower, then the date on which the agreement fixes the interest rate is the date the rate was set. If a rate is re set after a lock in agreement is executed (for example, because the borrower exercises a float down option or the agreement expires), then the relevant date is the date the rate is re set for the final time before closing. If no lock in agreement is executed, then the relevant date is the date on which the institution sets the rate for the final time before closing. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

23 HOEPA STATUS ONLY FOR LOANS ORIGINATED OR PURCHASED 1 HOEPA loan 2 Not a HOEPA loan a. If an originated or purchased loan is subject to HOEPA because the APR or the points and fees exceed the HOEPA triggers, enter code 1. b. Enter code 2 in all other cases. For example, enter code 2 for a non HOEPA loan you originated or purchased; also enter code 2 for an application that does not result in a loan origination. LEANING LIEN STATUS ONLY FOR APPLICATIONS AND ORIGINATIONS Use these codes for loans that you originate and for applications that do not result in an origination. 1 Secured by a first lien 2 Secured by a subordinate lien 3 Note secured by a lien 4 Not applicable (purchased loans) a. Use codes 1 through 3 for loans that you originate, as well as for applications that do not result in an origination (applications that are approved but not accepted, denied, withdrawn, or closed for incompleteness). b. Use code 4 for loans that you purchase. LOANS SOLD Enter the applicable code to indicate whether a loan that your institution originated was then sold to a secondary market entity within the same calendar year. a. Use code 0 for applications that were denied, withdrawn, or approved but not accepted by the applicant; and for files closed for incompleteness. b. Use code 0 if you originated or purchased a loan and did not sell it during that same calendar year. If you sell the loan in a succeeding year, you need not report the sale. 0 Loan was not originated or was not sold in calendar year covered by the LAR 1 Fannie Mae 2 Ginnie Mae 3 Freddie Mac 4 Farmer Mac 5 Private securitization 6 Commercial bank, savings bank, or savings association 7 Life insurance company, credit union, mortgage bank, or finance company 8 Affiliate institution 9 Other type of purchaser c. Use code 2 if you conditionally assign a loan to Ginnie Mae in connection with a mortgage backed security transaction. d. Use code 8 for loans sold to an institution affiliated with you, such as your subsidiary or a subsidiary of your parent corporation. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

24 Property Type Modular homes. Is a modular home a manufactured home for purposes of Regulation C? For Regulation C reporting, a manufactured home is one that meets the HUD code, 12 CFR 203.2(i). The official staff commentary indicates that modular homes that are ready for occupancy when they leave the factory and meet all of the HUD code standards are included in the definition of "manufactured home." The comment and a prior FAQ on this site have raised questions about whether a modular home should be reported as a manufactured home or as a one to four family dwelling. Until the Board provides further guidance regarding modular homes, lenders may, at their option, report a modular home as either a one to four family dwelling or as a manufactured home. Action Taken Conditional approvals customary loan commitment or loan closing conditions. The commentary indicates that an institution reports a "denial" if an institution approves a loan subject to underwriting conditions (other than customary loan commitment or loan closing conditions) and the applicant does not meet them. See comment 4(a)(8) 4. What are customary loan commitment or loan closing conditions? Customary loan commitment or loan closing conditions include clear title requirements, acceptable property survey, acceptable title insurance binder, clear termite inspection, and, where the applicant plans to use the proceeds from the sale of one home to purchase another, a settlement statement showing adequate proceeds from the sale. See comments 2(b) 3 and 4(a)(8) 4. An applicant's failure to meet one of those conditions, or an analogous condition, causes the application to be coded "approved but not accepted." Customary loan commitment and loan closing conditions do not include (1) conditions that constitute a counter offer, such as a demand for a higher down payment; (2) underwriting conditions concerning the borrower's creditworthiness, including satisfactory debt to income and loanto value ratios; or (3) verification or confirmation, in whatever form the lender ordinarily requires, that the borrower meets underwriting conditions concerning borrower creditworthiness. Conditional approvals failure to satisfy creditworthiness conditions. How should a lender code "action taken" where the borrower does not satisfy conditions concerning creditworthiness? If a credit decision has not been made and the borrower has expressly withdrawn, use the code for "application withdrawn." That code is not otherwise available. See Appendix A, I.B.1.d. If the condition involves submitting additional information about creditworthiness the lender needs to make a credit decision and the applicant has not responded to a request for the additional information in the time allowed, use the code for "file closed for incompleteness." See Appendix A, I.B.1.e. If the borrower has supplied the information the lender requires for a credit decision and the lender denies the application or extends a counter offer that the borrower does not accept, use the code for "application denied." If the borrower has satisfied the underwriting conditions of the lender and the lender agrees to extend credit but the loan is not consummated, then use the code for "application approved but not accepted." For example, if approval is conditioned on a satisfactory appraisal and, despite notice of the need for an appraisal, the applicant declines to obtain an appraisal or does not respond to the lender's notice, then the application should be coded "file closed for incompleteness." If, on the other hand, the applicant obtains an appraisal but the appraisal does not support the assumed loan to value ratio and the lender is therefore not willing to extend the loan amount sought, then the lender must use the code for "application denied." Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

25 Loan Purpose Refinancing coverage vs. reporting. Why are there two definitions of "refinancing," one for "coverage" and one for "reporting"? A lender uses the reporting definition, 203.2(k)(2), to determine whether to report a particular application, origination, or purchase as a "refinancing" in the loan purpose field; a lender uses the coverage definition, 203.2(k)(1), to determine whether the institution has sufficient home purchase loan activity, including refinancings of home purchase loans, for the institution to be covered by HMDA.. See 203.2(e)(1)(iii), 203.2(e)(2)(i) and (iii). The coverage definition is not relevant to determining whether to report a particular transaction as a refinancing. Refinancing loan purpose. If an obligation satisfies and replaces another obligation, is the purpose of the replaced obligation relevant to whether the new obligation is a reportable "refinancing" under Regulation C? No. The new definition of a reportable refinancing looks only to whether (1) an obligation satisfies and replaces another obligation and (2) each obligation is secured by a dwelling. See 203.2(k)(2). Thus, for example, a satisfaction and replacement of a loan made for a business purpose is a reportable refinancing if both the new loan and the replaced loan are secured by a dwelling. Refinancing line of credit. If a dwelling secured line of credit satisfies and replaces another dwelling secured obligation, is the line required to be reported as a "refinancing"? No. A dwelling secured line of credit that satisfies and replaces another dwelling secured obligation is not required to be reported as a "refinancing," regardless of whether the line is for consumer or business purposes. Refinancing guaranty secured by dwelling. If an obligation secured by a dwelling is satisfied and replaced by an obligation in which a guaranty of the credit obligation is secured by a dwelling but the new credit obligation is not secured by a dwelling, is the transaction reportable under HMDA? No, a transaction is not reportable as a home purchase loan or refinancing unless the credit obligation, itself, is secured by a dwelling. See 203.2(h), 203.2(k)(2). An obligation not secured by a dwelling is reportable as a home Refinancing satisfaction of lien. Is the satisfaction of a lien (mortgage) relevant to determining whether an obligation is a reportable refinancing? No, the satisfaction of a lien is neither necessary nor sufficient to create a reportable refinancing. The credit obligation must be satisfied and replaced; it is not relevant whether the lien is satisfied and replaced. See 203.2(k)(2) Refinancing cash out for home improvement. How should a lender code a dwelling secured loan when the borrower uses the funds both to pay off an existing dwelling secured loan and to make improvements to a dwelling? A dwelling secured loan that meets the definitions of both "home improvement loan" and "refinancing" should be coded as a "home improvement loan." See comment 203.2(g) 5. The lender must code the loan as a "home improvement loan" even if the lender does not classify it in the lender's own records as a "home improvement loan." See 203.2(g)(1). MECAs. Should MECAs (Modification, Extension and Consolidation Agreements) be reported under HMDA as refinancings? No. The rule is unchanged: MECAs are not reportable as refinancings under Regulation C. Temporary Financing. When is a loan "temporary financing" such that it is exempt from reporting? The regulation lists as examples of temporary financing construction loans and bridge loans. See 203.4(d)(3). Construction and bridge loans are illustrative, not exclusive, examples of temporary financing. The examples indicate that financing is temporary if it is designed to be replaced by permanent financing of a much longer term. A loan is not temporary financing merely because its term is short. For example, a lender may make a loan with a 1 year term to enable an investor to purchase a home, renovate it, and re sell it before the term expires. Such a loan must be reported as a home purchase loan. See 203.2(h). Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

26 Reverse Mortgage reporting. Does a lender have to report information on applications and loans involving reverse mortgages? Reverse mortgages are subject to the general rule that lenders must report applications or loans that meet the definition of a home purchase loan, home improvement loan, or refinancing (see 12 C.F.R (g) (h), (k)). Note, however, that reporting is optional if the reverse mortgage (in addition to qualifying as a home purchase loan, home improvement loan, or refinancing) is also a home equity line of credit (HELOC). See 12 C.F.R (c)(3). The official staff commentary to Regulation C states that a lender who opts to report a HELOC should report in the loan amount field only the portion of the line intended for home improvement or home purchase. See comment 4(a)(7) 3. Preapprovals Program In general. An element of the definition of "preapproval request" is the existence of a "program." How is it determined whether a program exists? A preapproval program exists when the procedures established and used by the lender match those specified in 203.2(b)(2). A program, regardless of its name, is not a "preapproval program" for purposes of HMDA if the program does not meet the specifications in the regulation. By the same token, a program may be a preapproval program for purposes of HMDA even though it is not so named. The question is whether the lender regularly uses the procedures specified in the regulation. If a lender has not established procedures like those specified in the regulation, but considers requests for preapproval on an ad hoc basis, those requests need not be treated as requests for preapproval under HMDA. Failure to establish and consistently follow uniform procedures, however, may raise fair lending and safety and soundness issues. Program Commitment letter issued on request. If a lender issues a commitment letter only at the applicant's request, does the lender have a preapproval program? If a lender will as a general matter issue written commitments under the terms and procedures described in 203.2(b)(2), then the lender has a preapproval program regardless whether the lender gives a written commitment to all applicants who qualify for preapproval or only to those qualifying applicants who specifically ask for a commitment in writing. Preapproval request approved and accepted, but loan not originated. How should a lender report a preapproval request it has approved where the borrower subsequently identified a property to the lender but a loan was not originated? When a borrower who has received a written commitment in response to a preapproval request identifies a property to the lender but the loan fails to originate, in the "type of action" field the lender must record the reason for the failure of the loan to originate whether the reason is that the application was later withdrawn, was denied at a later stage, was determined later to be incomplete, or was approved but not accepted. Neither code '7' ("preapproval request denied") nor code '8' ("preapproval request approved but not accepted") should be used, as the application has passed the preapproval stage. In the "request for preapproval" field, code '1' (preapproval was requested) must be used. See Appendix A, I.A.8. & I.B.1. For example: (1) an applicant submits a request for approval, (2) the request is granted in the form of a written commitment containing only the conditions specified in the regulation, (3) the applicant identifies a property, (4) the appraisal is less than the borrower anticipated and the lender is not willing to lend the amount stated in the commitment letter, and (5) the lender counteroffers with a lower loan amount but the borrower does not accept. In these circumstances, the lender would use code '3' in the "type of action" field ("application denied by financial institution") and code '1' in the "request for preapproval" field ("preapproval was requested"). Preapproval request approved but no property identified. How should a lender report a preapproval request it approved if the borrower did not later identify a property to the lender? Reporting of the transaction is optional. If the transaction is reported, the lender uses code '8' ("preapproval request approved but not accepted") under "type of action" and code '1' ("preapproval was requested") under "request for preapproval." See Appendix A, I.A.8. & I.B.1. Loan amount preapproval request denied. What loan amount should be entered if a preapproval request is denied? If the applicant requested approval for a specific loan amount, enter that amount. If the applicant did not request approval for a specific amount, enter '1' (for $1,000). Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

27 Loan amount preapproval request approved but not accepted. What loan amount should be entered if a preapproval request is approved but not accepted and the lender opts to report the transaction? If the applicant requested approval for a specific loan amount, enter that amount unless the lender approved the applicant for a higher amount, in which case, enter that higher amount. If the applicant did not request approval for a specific loan amount, enter the amount stated on the commitment letter. Sex, Race & Ethnicity General Hispanic ethnicity. If an applicant self identifies as "Hispanic or Latino" under the category of "Ethnicity," what options under "Race" are available? The applicant should be asked to identify a race or races from among the five choices available. See question below on Definitions of races and Hispanic ethnicity. If a lender is face to face with an applicant who (1) has self identified as "Hispanic or Latino" (or whom the lender has identified as of that ethnicity because the applicant has declined to self identify) and (2) has not identified a race, the lender must identify whatever race or races the lender believes apply, based on surname and visual observation. In those circumstances, the lender may not indicate "NA" in the race field. "NA" is used in the race field only if (1) the applicant is not a natural person, (2) the HMDA reporter has purchased, not originated, the loan, or (3) an application taken in 2003 reached final action in 2004 (see comment 203.4(a)(iv)(B)(3)). Definitions of races and Hispanic ethnicity. Where can one find definitions of the five races and Hispanic ethnicity? The Office of Management and Budget has adopted definitions of the five races and Hispanic ethnicity. They can be found at OMB's definitions may be offered to the applicant as an aid, but the choice of how to self identify is entirely the applicant's. Telephone applicant declines to provide race, ethnicity or sex. If an applicant declines to provide the race, ethnicity, or sex in an application taken entirely by mail, Internet, or telephone, should the lender attempt to identify the missing information for example, based on the applicant's voice or surname? No. If an application is taken entirely by mail, Internet, or telephone, and the applicant declines to provide information on ethnicity, race, or sex, the lender must use the code for "information not provided by applicant in mail, Internet, or telephone application." Collection of partial information. When collecting government monitoring information (ethnicity, race, sex), must a lender permit an applicant to choose to fill in only one or two, rather than all three, of the fields? Yes. A lender must permit an applicant to choose to fill in only one or two of the three fields. For example, a Web based application should not compel the applicant to choose between making selections in each of the three fields and declining to make any selections whatsoever. Unless the applicant clearly indicates the applicant declines to supply any information, the applicant must be given the opportunity to supply any part of the information the applicant chooses. Reporting of partial information. If an applicant chooses to make selections in one or two, but not all three, fields (ethnicity, race, sex), must the lender report the partial information? Yes. A lender must report whatever information the applicant supplies, whether partial or complete. For example, if, on an application submitted by mail, an applicant marks a box indicating the applicant does "not wish to furnish" government monitoring information but supplies some or all of the information, the lender must report the information supplied. Three do not wish to furnish boxes. The sample data collection form in Appendix B contains, for each applicant, one box for the applicant to indicate "I do not wish to furnish this information." In place of one box for all three fields (ethnicity, race, sex), may a lender place a donot wish to furnish box in each of the three fields? Yes. A lender may place a box indicating "I do not wish to furnish this information" under each of the three field titles (ethnicity, race, sex) instead of a do not wish to furnish box that applies to all three fields as a group. Similarly, in a telephone application a lender may wait to read the do not wish to furnish option until the lender has reviewed the selections in each field, or the lender may decline altogether to state that option expressly so long as (a) the applicant is clearly informed that providing the information, though encouraged, is not required, and (b) if the applicant declines to provide any part of the information, the lender so indicates. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

28 Rate Spread Average Prime Offer Rates. May a lender use average prime offer rates other than those in the Board's tables? Yes. A lender may use either the average prime offer rates published by the Board or may determine average prime offer rates by employing on the FFIEC web site with the tables. A lender that determines average prime offer rates for itself, however, bears the risk of liability for the methodology published incorrect calculations. Assumptions rate spread not reported. Must lenders report the rate spread for assumptions that are reportable under HMDA? No. HELOCs rate spread not reported. If a lender opts to report information on HELOCs, must it report the rate spread? No. Brokered loans rate set date. What date is the rate considered to be "set" when an investor that makes a credit decision prior to closing, and thus has reporting responsibility for a loan, originates the loan through a broker, as discussed in staff comment 1(c) 2? The last date the investor set the rate with the broker, not the date the broker set the borrower's rate. Balloon loans rate spread. If the amortization period of a loan is longer than the term to maturity or the initial, fixed rate period, as applicable, (the "term") of the loan i.e., because the loan has a balloon feature should the lender use the term or the amortization period in determining the applicable average prime offer rate? The term must be used. See 203.4(a)(12). For example, in the case of a fixed rate loan that has term to maturity of five years and has a balloon payment because the payments are amortized over 30 years, the term of five years must be used. In the case of a variable rate loan that has a term to maturity of 30 years and whose rate is fixed for five years and then adjusts annually over 25 additional years, the term of five years must be used. Reverse Mortgages rate spread. If a lender reports an application or loan for a reverse mortgage, does the lender have to report a rate spread? Yes, unless the reverse mortgage is a HELOC, for which lenders are not required to report rate spread. See HELOCs rate spread not reported. Change in loan program rate set date. What date is the rate considered to be "set" when a lender issues a rate lock commitment under one loan program, the consumer subsequently changes to another program that is subject to different pricing terms, and the lender changes the rate promised to the consumer under the rate lock commitment accordingly? Except as provided in the following sentence, the date of the program change is the date the rate is set. If the lender changes the promised rate to the rate that was available under the new program on the date of the original rate lock commitment, that is the date the rate is set provided the lender consistently follows this practice in all such cases or the original rate lock agreement so provides. Loan term rate spread. What term should a lender use to find the average prime offer rate for a comparable transaction when the loan's term to maturity (or, for an adjustable rate loan, the initial fixed rate period) is not in whole years? The lender should use the number of whole years closest to the actual term; if the actual term is exactly halfway between two whole years, the lender should use the shorter of the two. For example, for a loan term of 10 years and three months, enter in the rate spread calculator (or choose the column of the appropriate average prime offer rate table corresponding to) 10 years; for a loan term of 10 years and nine months, enter (or choose the column for) 11 years; for a loan term of 10 years and six months, enter (or choose the column for) 10 years. If a loan term includes an odd number of days, in addition to an odd number of months, the lender first should round to the nearest whole month, again rounding down if the number of odd days is exactly halfway between two months. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

29 Type of Purchaser Private securitization. When should code 5 for "private securitization" be used? Code '5' is to be used for securitizations by purchasers other than by one of the government sponsored enterprises identified in codes '1' through '4'. If an institution selling a loan knows or reasonably believes that the loan will be securitized by the institution purchasing the loan, then the seller should use code '5' for "private securitization" regardless of the type or affiliation of the purchasing institution. Reasonable belief or knowledge could, for example, be based on the purchase agreement or other related documents, the institution's previous transactions with the purchaser, or the purchaser's role as a securitizer (such as an investment bank). If an institution selling a loan does not know whether the purchaser will securitize the loan, and, the seller knows that the purchaser frequently holds or disposes of loans by means other than securitization, then the seller should use one of codes '6' through '9', depending on the nature of the purchaser. Mortgage banks. What is a "mortgage bank" for purposes of code '7'? A "mortgage bank," often referred to as a mortgage company, means, for these purposes, a non depository institution that purchases mortgage loans and typically originates such loans. A "mortgage bank" might be an affiliate or a subsidiary of a bank or thrift holding company or it might be an independent mortgage company. In either case, use code '7' unless the purchaser is an affiliate of the seller, itself, in which case use code '8'. Subsidiaries of depository institutions. How should a sale to a subsidiary of a depository institution be coded? Use code '6' if the subsidiary is, itself, a depository institution (a commercial bank, savings bank, or savings association). If the subsidiary is not a depository institution, such as a mortgage company or finance company, use code '7'. If the subsidiary is an institution of a type other than the types identified in codes '6' and '7', however, use code '9.' Notwithstanding the foregoing, if the subsidiary is an affiliate of the seller, itself, then use code '8'. Bank or thrift holding companies. How should a sale to a bank or thrift holding company be coded? For a sale to a bank or thrift holding company (rather than to one of its subsidiaries), use code '9' unless the holding company is an affiliate of the seller, in which case use code '8'. HOEPA Status Reverse Mortgages HOEPA Status. If a lender reports an application or loan for a reverse mortgage, should a lender report HOEPA status? Reverse mortgages are not subject to the Home Ownership and Equity Protection Act of 1994 (HOEPA). See 15 U.S.C. 1602(aa)(1). Therefore, a lender should enter the code for not applicable for HOEPA status. Last Modified by the FFIEC: 05/04/2010 Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

30 While conducting HMDA audits, I find myself noting a few issues and misunderstandings over and over. The issues listed below appear to be recurring problems. Please make sure you re up to speed on these matters. File Documentation. An auditor or examiner should be able to verify all LAR data by looking at the documents in the file. Make sure all HMDA data is correctly and accurately documented in the file. When necessary, explain data by an initialed and dated note to the file. Application Date. The actual application date must be reported on the LAR. Make sure the application date is correctly determined and accurately documented in the file. Multiple Application Forms. For HMDA reporting purposes, one joint applicant must be identified as the borrower and the other joint applicant must be identified as the co borrower. If the applicants can t apply at the same time and the lender uses two different application forms, make sure the application forms identify one applicant as the borrower and the other applicant as the co borrower. Some loan platform systems may automatically identify each applicant as the borrower. When this is the case, the lender can simply modify one of the borrower designations by a handwritten note (initialed and dated) on the form. Property Location Not on Geocode System. For some addresses, the FFIEC Geocoding system cannot provide the property s location (MSA, state code, county code and census tract). In such a case, the user clicks on the link for the zip code map... and property location data is automatically provided in a box in the corner of the screen. Understand, however, that the automatically provided census tract is based on the assumption that the property is exactly in the middle of the zip code map (where the red marker appears). Accordingly, the reported census tract may or may not be the census tract for the property in question. An accurate census tract can only be determined by moving the red marker to the property s exact location. The exact location can be determined by using Mapquest or by asking the lender or borrower to pinpoint the property s exact location. Note: The Standard Flood Hazard Determination Form may contain Geocode information, but the provided census tract may simply reflect the census tract at the center of the zip code. As indicated above, this center of the map census tract may be correct part of the time... but not always. Bottom line: When the property does not appear on the FFIEC Geocode system, the user must go to the zip code map, move the red marker to the exact location of the property, and report the resulting census tract. Rate Spread and Commercial Loans. The HMDA instructions make in clear that that rate spread must be reported as NA on commercial loans... even if the applicant is an individual person (sole proprietor). Income and Non Person Business Entities. When the applicant is a non person business entity (corporation, partnership, LLC), the income must be reported as NA. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

31 HMDA WORKSHEET BORROWER APPLICATION OR LOAN INFORMATION LOAN NUMBER APPLICATION DATE LOAN TYPE PROPERTY TYPE PURPOSE OF LOAN OWNER OCCUPANCY 1 Conventional (other than FHA, VA,FSA or RHS) 2 FHA-insured 3 VA-guaranteed 4 FSA/RHS 1 One-to-four-family (other than manufactured housing) 2 Manufactured housing 3 Multifamily 1 Home purchase 2 Home improvement 3 Refinancing 1 Owner-occupied as a principal dwelling 2 Not owner-occupied 3 Not applicable This is the date the applicant asked for the loan A conventional loan (Code 1) is any loan other than FHA, VA, FSA or RHS loans FSA Farm Service Agency RHS Rural Housing Service If multiple properties, See MULTIPLE PROPERTIES below. Use Code 1 if the property is an individual condominium unit. If cannot determine whether property is a manufactured home, used Code 1 If both (i) purchase and (ii) improvement... report as a home purchase If both (i) refinancing and (ii) improvement... report as home improvement If loan is a refinancing and loan agreement requires CU to refinance, loan is not reportable If multiple properties, See MULTIPLE PROPERTIES below. Indicate whether the dwelling is or will be occupied by the dwelling s owner Use Code 2 for vacation homes and rental properties Use Code 3 if property is (i) multi-family dwelling, (ii) not located in a MSA, or (iii) located in a MSA in which the CU has neither a home or branch office LOAN AMOUNT Indicate amount in thousands round $500 to next $1,000 For denied/withdrawn application, enter the amount applied for PREAPPROVAL HOME PURCHASE LOANS ONLY 1 Preapproval was requested 2 Preapproval was not requested 3 Not applicable If CU does not have a formal preapproval program, enter Code 3 ACTION TAKEN TYPE OF ACTION TAKEN DATE OF ACTION TAKEN 1 Loan originated 2 Application approved but not accepted 3 Application denied by CU 4 Application withdrawn by applicant 5 File closed for incompleteness 6 Loan purchased by CU 7 Preapproval request denied by CU 8 Preapproval request approved but not accepted (optional) Code 1 Applicant accepts counteroffer Code 2 Application was approved, but applicant failed to respond Code 3 Applicant turns down the counteroffer (or does not respond) Code 4 Application expressly withdrawn by applicant before a credit decision was made Code 5 Applicant failed to respond to notice of incompleteness Originated loans - closing date Purchased loans date CU purchased the loan Denied applications - date CU denied the loan Withdrawn applications date received by CU (if in writing, show date of document) Application approved but not accepted approval date PROPERTY LOCATION MSA CODE STATE CODE COUNTY CODE CENSUS TRACT CLICK ON GEOCODING/MAPPING SYSTEM MULTIPLE PROPERTIES Home-improvement loan. Report the property being improved. If more than one report the location of one of the properties being improved. Home-purchase loan. Report the property taken as security. If more than one report the location of the property being purchased. If the loan is to purchase multiple properties and is secured by multiple properties, report the location of just one of the properties. Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,

32 APPLICANT INFORMATION ETHNICITY APPLICANT 1 Hispanic or Latino 2 Not Hispanic or Latino 3 Inf not provided (mail or teleph applic) 4 Not applicable 5 No co-applicant CO-APPLICANT 1 Hispanic or Latino 2 Not Hispanic or Latino 3 Inf not provided (mail or teleph applic) 4 Not applicable 5 No co-applicant If applicant or co-applicant is not a natural person, use Code 4 If there is more than one co-applicant, provide information only for the first co-applicant listed on the application form RACE 1 American Indian or Alaskan Native 2 Asian 3 Black or African American 4 Native Hawaiian or Other Pacific Islander 5 White 6 Inf not provided (mail or teleph applic) 7 Not applicable 8 No co-applicant 1 American Indian or Alaskan Native 2 Asian 3 Black or African American 4 Native Hawaiian or Other Pacific Islander 5 White 6 Inf not provided (mail or teleph applic) 7 Not applicable 8 No co-applicant If applicant or co-applicant is not a natural person, use Code 7 If there is more than one co-applicant, provide information only for the first co-applicant listed on the application form If the applicant selects more than one racial designation, enter all appropriate codes SEX 1 Male 2 Female 3 Inf not provided (mail or teleph applic) 4 Not applicable 5 No co-applicant 1 Male 2 Female 3 Inf not provided (mail or teleph applic) 4 Not applicable 5 No co-applicant If applicant or co-applicant is not a natural person, use Code 4 If there is more than one co-applicant, provide information only for the first co-applicant listed on the application form INCOME Use gross annual income the CU relied on in its decision Show amounts in thousands round $500 to $1000 For loans on multi-family dwellings, use NA If no income was requested/relied on in the decision, enter NA If loan of CU employee, may enter NA for privacy OTHER DATA TYPE OF LOAN PURCHASER 0 - Loan not originated and sold in calendar year covered by the LAR 1 - Fannie Mae 2 - Ginnie Mae 3 - Freddie Mac 4 - Farmer Mac 5 - Private securitization 6 - Commercial bank, savings bank or savings association 7 - Life insurance company, credit union, mort bank or finance company 8 - Affiliate instituation 9 - Another type of purchaser This section indicates whether this loan was both (i) originated and (ii) sold on the secondary market in the same calendar year. Use Code 0 for applications that were: Denied, withdrawn or approved but not accepted by applicant Files closed for incompleteness Use Code 0 if CU originated (or purchased) the loan and did not sell that loan during the same calendar year. If the loan is sold in a later year, that sale is not reported. RATE SPREAD ONLY FOR THE FOLLOWING ORIGINATED LOANS: Home purchase Refinancing Dwelling secured home improve loan LOAN DATE APR TERM IN YEARS LIEN STATUS CLICK ON RATE SPREAD CALCULATOR This is the spread between the APR and the applicable average prime offer rate (APOR). The spread will depend on whether loan is secured by a first mortgage or a subordinate mortgage. Enter NA if the loan: Is not subject to Reg Z (is a business or agricultural loan); Is a home-improvement loan that is not dwelling-secured; Is a loan purchased by CU; The application did not result in a loan origination; or The rate spread calculator indicated NA. HOEPA STATUS ONLY FOR LOANS ORIGINATED OR PURCHASED 1 HOEPA loan 2 Not a HOEPA loan Use Code 1 if HOEPA loan. Loan is subject to HOEPA if: Consumer-purpose Secured by the consumer s principal dwelling Purpose other than buying/building the dwelling Closed-end credit Rates or fees exceed the HOEPA triggers Enter Code 2 if HOEPA does not apply LIEN STATUS 1 Secured by a first lien 2 Secured by a subordinate lien 3 Not secured by a lien 4 Not applicable (purchased loans) Use Codes 1 through 3: Loans that CU originated Applications that did not result in an origination Use Code 4 for loans purchased Copyright Total Training Solutions and Anne Lolley HMDA Webinar for Credit Unions December 10,