Introduction. Disclaimer. Consumer Credit Reporting Mortgage Reporting Guidelines

Transcription

1 Consumer Credit Reporting Mortgage Reporting Guidelines CDIA Metro 2 Format Task Force Equifax, Experian, Innovis, TransUnion Introduction Focus of today s session is on complete and accurate reporting, specific to mortgage accounts. Copyright 2010 Consumer Data Industry Association 2 Disclaimer The purpose of this training is to provide guidance in Metro 2 reporting. This information is not intended to be legal advice. Furnishers of information are solely responsible for the accuracy of the information furnished to a consumer reporting agency. Copyright 2010 Consumer Data Industry Association 3

2 No legal advice. Any person using the CRRG, the Metro 2 Format, or information from the Metro 2 Task Force concerning the Metro 2 Format; or any software vendors that provide Metro 2 programming software acknowledges that such documents or communications are not made available for the purpose of providing legal advice or other counsel concerning the accuracy of the information furnished to a consumer reporting agency. Such persons rely solely upon their own determination as to the selection of the appropriate Metro 2 Code to meet any furnisher obligations under the FCRA. Copyright 2010 Consumer Data Industry Association 4 Disclaimer of liability. Any person using the CRRG, the Metro 2 Format, or information from the Metro 2 Task Force concerning the Metro 2 Format; or any software vendors that provide Metro 2 programming software acknowledges that the fees paid, directly or indirectly, to receive the CRRG, the Metro 2 Format, or information from the Metro 2 Task Force concerning the Metro 2 Format are based upon the expectation that such person will be solely responsible for the accuracy of the information furnished to a consumer reporting agency. Copyright 2010 Consumer Data Industry Association 5 ANY PERSON USING THE CRRG, THE METRO 2 FORMAT OR INFORMATION OBTAINED FROM THE METRO 2 TASK FORCE; OR ANY SOFTWARE VENDORS THAT PROVIDE METRO 2 PROGRAMMING SOFTWARE AGREES THAT UNDER NO CIRCUMSTANCES WILL THE CONSUMER DATA INDUSTRY ASSOCIATION (CDIA) OR ANY CONSUMER REPORTING AGENCY HAVE ANY OBLIGATION OR LIABILITY TO SUCH PERSON FOR ANY DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES SUSTAINED BY SUCH PERSON ARISING OUT OF SUCH PERSON S FURNISHING OF CONSUMER INFORMATION TO A CONSUMER REPORTING AGENCY REGARDLESS OF HOW SUCH DAMAGES ARISE AND WHETHER OR NOT THE CONSUMER REPORTING AGENY OR CDIA WAS ADVISED SUCH DAMAGES MIGHT ARISE. SHOULD THIS DISCLAIMER CONFLICT WITH ANY PROVISION OF ANY OTHER AGREEMENT, SUCH PERSON AGREES THAT THIS DISCLAIMER SHALL SUPERSEDE SUCH CONFLICTING PROVISION. Copyright 2010 Consumer Data Industry Association 6

3 Discussion Topics Mortgage Loan Reporting Guidelines Mortgage & Home Equity Loan Modifications Loans in Forbearance Short Sales Stages of Foreclosure Loan Assumptions Sold or Transferred Accounts Frequently Asked Questions & Answers Copyright 2010 Consumer Data Industry Association 7 Mortgage Loan Reporting Guidelines Mortgage lenders report 3 basic Portfolio Types: Mortgage (M) Examples: Conventional Mortgage, Second Mortgage, VA Mortgage Installment (I) Examples: Home Improvement, Home Equity, Construction Loan Line of Credit (C) Home Equity Line of Credit Copyright 2010 Consumer Data Industry Association 8 Mortgage Portfolio Type Account Types: 19 = FHA R/E 25 = VA R/E 26 = Conventional R/E 5A = R/E, Jr. Liens & Non-Purchase Money First 5B = Second Mortgage 6B = Commercial Mortgage 2C = Farmers Home Administration R/E 08 = R/E, Specific Type Unknown Terms Duration = Number of Years Copyright 2010 Consumer Data Industry Association 9

4 Mortgage Portfolio Type Highest Credit/Original Loan Amount Original amount of the loan, excluding interest payments Current Balance Principal balance plus the interest and escrow due each month Scheduled Monthly Payment Amount Regular monthly payment, including principal, interest and escrow Copyright 2010 Consumer Data Industry Association 10 Mortgage Portfolio Type Account Status Special Comment Compliance Condition Code Copyright 2010 Consumer Data Industry Association 11 Interest Type Indicator Designates the interest type: F = Fixed V = Variable/adjustable Report indicator V for loans where the interest rate will be variable at some point, even if the interest rate starts as fixed. Copyright 2010 Consumer Data Industry Association 12

5 Mortgage Portfolio Type ECOA Codes All valid Metro 2 ECOA Codes are applicable for mortgage accounts except Authorized Users (3). Copyright 2010 Consumer Data Industry Association 13 Mortgage Portfolio Type K3 Segment Two purposes: Secondary marketing agency information (Fannie Mae & Freddie Mac only) Mortgage Identification Number (MIN) Copyright 2010 Consumer Data Industry Association 14 Mortgage Portfolio Type K3 Segment Secondary Marketing Agency Information Agency Identifier Fannie Mae = 01 Freddie Mac = 02 Fannie Mae/Freddie Mac Account Number Mortgage Identification Number Agency Identifier 00 = Used when reporting MIN only MIN Copyright 2010 Consumer Data Industry Association 15

6 Mortgage Portfolio Type K4 Segment Specialized Payment Information Balloon Payment Due Date & Amount Example: Segment ID = K4 Specialized Payment Indicator = 01 Payment Due Date = Payment Amount = Copyright 2010 Consumer Data Industry Association 16 Installment Portfolio Type Account Types: 04 = Home Improvement 05 = FHA Home Improvement 17 = Manufactured Housing 0A = Time Share Loan 9A = Secured Home Improvement 6D = Home Equity 0F = Construction Loan Terms Duration = Number of Months Copyright 2010 Consumer Data Industry Association 17 Installment Portfolio Type Highest Credit/Original Loan Amount Original amount of the loan, excluding interest payments Current Balance Outstanding balance amount Scheduled Monthly Payment Amount Regular monthly payment Copyright 2010 Consumer Data Industry Association 18

7 Installment Portfolio Type Account Status Special Comment Compliance Condition Code Copyright 2010 Consumer Data Industry Association 19 Interest Type Indicator Designates the interest type: F = Fixed V = Variable/adjustable Report indicator V for loans where the interest rate will be variable at some point, even if the interest rate starts as fixed. Copyright 2010 Consumer Data Industry Association 20 Installment Portfolio Type K3 Segment not applicable K4 Segment Balloon Payment Information Copyright 2010 Consumer Data Industry Association 21

8 Line of Credit Portfolio Type Account Type: 89 Home Equity Line of Credit Terms Duration = LOC Copyright 2010 Consumer Data Industry Association 22 Line of Credit Portfolio Type Credit Limit Assigned credit limit Highest Credit/Original Loan Amount Highest balance ever attained Current Balance Outstanding balance amount Scheduled Monthly Payment Amount Minimum amount due based on balance Balloon Payment Amount & Due Date K4 Segment Copyright 2010 Consumer Data Industry Association 23 Line of Credit Portfolio Type Closed Accounts Special Comment Code M Account closed at credit grantor s request Compliance Condition Code XA Account closed at consumer s request Copyright 2010 Consumer Data Industry Association 24

9 Line of Credit Portfolio Type Additional Special Comments CJ = Credit line no longer available in repayment phase CK = Credit line reduced due to collateral depreciation CL = Credit line suspended due to collateral depreciation CM = Collateral released by creditor/balance owing Copyright 2010 Consumer Data Industry Association 25 Common Questions Home Equity Can we report Account Type 5B (Second Mortgage) for home equity loans? Yes, however use of the specific home equity type codes (89, 6D) is preferred. If you choose to use Type 5B, be sure to report using the guidelines specific to the Mortgage portfolio type. How do we report a home equity line of credit when the account is closed because the current balance is greater than the property value? Continue to report the original Credit Limit and start reporting Special Comment M (account closed at credit grantor s request). Copyright 2010 Consumer Data Industry Association 26 Mortgage & Home Equity Loan Modifications Federal Loan Modification Programs: Making Home Affordable Hope for Homeowners Mortgage Loan Modification Program for Freddie Mac and Fannie Mae General Guidelines for Renegotiated Loans Copyright 2010 Consumer Data Industry Association 27

10 Making Home Affordable (HAMP) Guidelines for First Liens 3-month Trial Period (reduced payments) Current prior to & during trial period Report Account Status 11 and Special Comment AC. Delinquent prior to trial period Report Account Status that reflects the appropriate level of delinquency and Special Comment AC. Copyright 2010 Consumer Data Industry Association 28 Making Home Affordable (HAMP) Guidelines for First Liens Example: John s July payment of $1000 was 30 days delinquent prior to the trial period. His trial period payments are $500. Actual Payment Amount = Account Status = 71 (30 59 days past due date) Payment History Profile = Special Comment = AC Date of Account Information = Date of First Delinquency = Date of Last Payment = Copyright 2010 Consumer Data Industry Association 29 Making Home Affordable (HAMP) Results from Trial Period Loan Not Modified Report the account as per the original contract agreement. Loan Modified Continue to report one tradeline under the original account number & date opened. Copyright 2010 Consumer Data Industry Association 30

11 Original Loan Amount Terms Duration Scheduled Monthly Payment Amount Current Balance Original amount of the loan plus: Balloon Payment, if applicable Increases in principal balance due to capitalization of delinquent amounts Modified terms New amount as per modified agreement Principal balance plus: Balloon Payment, if applicable Interest & Escrow due for current month Copyright 2010 Consumer Data Industry Association 31 Account Status Special Comment K4 Segment Balloon Payment L1 Segment Account Number Change Appropriate code based on new terms of loan CN = Loan modified under a federal government plan Specialized Payment Indicator = 01 Balloon Payment Due Date Balloon Payment Amount New Account Number (if required by your system) Copyright 2010 Consumer Data Industry Association 32 Making Home Affordable Second Lien Modification Program (2MP) Modified second liens and partially extinguished second liens Follow reporting guidelines for modified first liens, including the trial period (if required) and loan modification. For partially extinguished second liens, the forgiven portion of the loan should be deducted from the current balance owed. Copyright 2010 Consumer Data Industry Association 33

12 Making Home Affordable Second Lien Modification Program (2MP) Fully extinguished second liens Account Status Code = 13 (paid) Payment Rating = applicable code Special Comment Code = AU (paid in full for less than the full balance) Current Balance & Amount Past Due = zero Date Closed = date account is forgiven and considered to be paid Copyright 2010 Consumer Data Industry Association 34 Renegotiated/Refinanced Mortgages Option 1 - Original Account Number and Date Opened are retained: Modify the amounts and terms as per the renegotiated/refinanced agreement. Fields that may be changed include: Original Loan Amount, Terms Duration, Terms Frequency, Scheduled Monthly Payment Amount and Current Balance Special Comment Code CO (Loan modified) may be reported. Copyright 2010 Consumer Data Industry Association 35 Renegotiated/Refinanced Mortgages Option 2 - Original Account Number changes and Date Opened remains the same: Follow option 1. In the first reporting period following the renegotiation: Report original Account Number in the Base Segment. Report an L1 Segment. Change Indicator = 1 (Consumer Account Number change only) New Consumer Account Number In subsequent reporting periods, the Base Segment should contain the new Account Number and the L1 Segment should not be reported. Copyright 2010 Consumer Data Industry Association 36

13 Renegotiated/Refinanced Mortgages Option 3 Account Number and Date Opened change: Report the original loan as follows: Account Status Code = 13 (Paid) Payment Rating = the appropriate code that identifies the status of the account within the activity period being reported Special Comment = AS (Account closed due to refinance) Current Balance and Amount Past Due = zero Report the renegotiated/refinanced loan as follows: New Account Number New Date Opened All other applicable fields Important Note: Payment history that occurred prior to the new Date Opened should not be reported with this new account. Copyright 2010 Consumer Data Industry Association 37 Loans in Forbearance If the consumer is required to make interest payments only, report: Terms Duration = terms of the loan, which can be changed if terms of the loan are extended Scheduled Monthly Payment Amount = amount of interest payment due Account Status = appropriate code for each month (e.g., Current, 30 days delinquent, 60 days delinquent) Current Balance = outstanding balance, which usually remains unchanged during the forbearance period Special Comment Code = BT (Principal Deferred/Interest Payment Only) Copyright 2010 Consumer Data Industry Association 38 Loans in Forbearance If the consumer is making reduced payments, report: Terms Duration = terms of the loan, which can be changed if terms of the loan are extended Scheduled Monthly Payment Amount = new payment due Account Status = appropriate code for each month (e.g., Current, 30 days delinquent, 60 days delinquent) Current Balance = outstanding balance amount, reflecting payments made Optional Special Comment = AC (Paying under a partial payment agreement) Copyright 2010 Consumer Data Industry Association 39

14 Loans in Forbearance If no payments are required during the forbearance period, follow the guidelines for deferred accounts: Terms Duration = blank fill Terms Frequency = D (Deferred) Scheduled Monthly Payment Amount = zero Account Status Code = 11 (Current account) Current Balance = the outstanding balance amount Amount Past Due = zero (continued on next slide) Copyright 2010 Consumer Data Industry Association 40 Loans in Forbearance If no payments are required (continued) Payment History Profile = Report valid payment history that occurred prior to forbearance. Report Character D for the months the account is in forbearance. In the K4 Segment, report the Specialized Payment Indicator 02 for Deferred Payment. Also, report the Deferred Payment Start Date as the date the first payment will be due. Copyright 2010 Consumer Data Industry Association 41 Short Sales Report the following fields: Account Status Code = 13 (Paid) or 65 (Account paid in full, foreclosure was started) Payment Rating = appropriate code for the reporting period Special Comment = AU (Account paid in full for less than the full balance) Current Balance & Amount Past Due = 0 Note: No specific code is available to indicate a short sale has occurred. Copyright 2010 Consumer Data Industry Association 42

15 Stages of Foreclosure Potential Foreclosure Foreclosure Proceedings Started Foreclosure Cancelled Foreclosure Started/Now Paid Deed in Lieu of Foreclosure Foreclosure Completed Copyright 2010 Consumer Data Industry Association 43 Stages of Foreclosure Potential Foreclosure: No specific code is available with this designation. Continue reporting the correct Account Status Code that defines the current condition of the account. For example, Account Status 82 represents 120 days delinquent or Account Status 84 represents 180 days delinquent. Copyright 2010 Consumer Data Industry Association 44 Stages of Foreclosure Foreclosure Proceedings Started: Report Special Comment Code BO (Foreclosure proceedings started). This special comment should be reported each month as long as the comment applies. Report the appropriate Account Status Code, such as Account Status 82 for 120 days delinquent. Copyright 2010 Consumer Data Industry Association 45

16 Foreclosure Proceedings Started Payment History Profile Example Date of Acct Info = 9/30/2010 Status = 82 (120 delinq.) Special Comment = BO Payment History Profile = (1 st character of PHP represents Status reported in August 2010.) Date of Acct Info = 10/30/2010 Status = 83 (150 delinq.) Special Comment = BO Payment History Profile = (1 st character of PHP represents Status reported in September 2010.) Copyright 2010 Consumer Data Industry Association 46 Stages of Foreclosure Foreclosure Cancelled: No specific code is available for this situation. If Special Comment Code BO had been reported, stop reporting the comment (i.e., blank out the Special Comment Code field). Copyright 2010 Consumer Data Industry Association 47 Stages of Foreclosure Foreclosure Started / Now Paid: Report Account Status Code 65 when foreclosure proceedings had been started, but the consumer subsequently paid the account balance in full. Account Status 65 specifies Account paid in full. A foreclosure was started. Report the appropriate Payment Rating in conjunction with this Account Status. Example: Payment Rating = 4 (120 days delinquent) within the activity period being reported Report Current Balance of zero. Copyright 2010 Consumer Data Industry Association 48

17 Stages of Foreclosure Deed in Lieu: Report Account Status Code 89 which specifies Deed received in lieu of foreclosure on a defaulted mortgage; there may be a balance due. Report the appropriate Payment Rating in conjunction with this Account Status. Copyright 2010 Consumer Data Industry Association 49 Stages of Foreclosure Foreclosure Completed: Report Account Status Code 94 (Foreclosure completed; there may be a balance due). Report the appropriate Payment Rating in conjunction with this Account Status. Copyright 2010 Consumer Data Industry Association 50 Stages of Foreclosure Deed in Lieu (Account Status 89) or Foreclosure Completed (Account Status 94): If consumer is held responsible for the balance left over after the sale of the property, it is appropriate to report a Current Balance. If consumer is no longer responsible for the remaining balance on the account, report Current Balance of zero. Copyright 2010 Consumer Data Industry Association 51

18 Loan Assumed by Another Consumer Option 1 - Consumer Account Number remains the same for the consumer who is assuming the loan. The consumers must be reported in separate reporting periods. Copyright 2010 Consumer Data Industry Association 52 Loan Assumed by Another Consumer Option 1 (continued) First month: Report the original consumer(s) with ECOA Code T (Terminated) and Special Comment Code H (Loan assumed by another party). Report the Current Balance as zero. Important Note: Do not report this consumer in subsequent reporting periods. Copyright 2010 Consumer Data Industry Association 53 Loan Assumed by Another Consumer Option 1 (continued) Following month: Report the new consumer(s). Change account information, if appropriate. For example, Terms Duration, Scheduled Monthly Payment, Current Balance or other fields may be different for the new consumer(s). Important Note: Do not report the original consumer s account history in the Payment History Profile. Copyright 2010 Consumer Data Industry Association 54

19 Loan Assumed by Another Consumer Option 2 - Consumer who is assuming the loan is given a new Consumer Account Number The consumers can be reported in the same reporting period. Copyright 2010 Consumer Data Industry Association 55 Loan Assumed by Another Consumer Option 2 (continued) Report original consumer(s) as follows: Original Account Number ECOA Code T (Terminated) Special Comment Code H (loan assumed by another party) Current Balance as zero Other appropriate account information Important Note: Do not report this consumer in subsequent reporting periods. Report new consumer(s) as follows: New Consumer Account Number Other appropriate account information Important Note: Do not report the original consumer s account history in the Payment History Profile. Copyright 2010 Consumer Data Industry Association 56 Accounts Sold or Transferred to Another Company Report the following Base Segment fields: Account Status Code = the code that specifies the status of the account prior to the sale Special Comment = AH (Purchased by another company) or O (Account transferred to another lender) Current Balance and Amount Past Due = zero FCRA Compliance/Date of First Delinquency = if the account is delinquent at the time of sale, report the date of the first delinquency Date Closed = date the account was sold, or if a HELOC was closed prior to being sold, the date the account was originally closed (continued) Copyright 2010 Consumer Data Industry Association 57

20 Sold Accounts Report the following K2 Segment fields: Portfolio Indicator = 2 (Sold to name) Sold To Name = Name of company to which the account was sold Important Note: If the account is delinquent or derogatory, it is imperative that you provide the date of the first delinquency to the company that purchased the account. Copyright 2010 Consumer Data Industry Association 58 Accounts Transferred Internally Report the following Base Segment fields: Account Status Code = the code that specifies the status of the account at the time of transfer Special Comment = AT (Account closed due to transfer) FCRA Compliance/Date of First Delinquency = if the account is delinquent at the time of transfer, report the date of the first delinquency Date Closed = date the account was transferred, or if a HELOC was closed prior to being transferred, the date the account was originally closed Copyright 2010 Consumer Data Industry Association 59 FAQ Reverse Mortgages Bankruptcy Chapter 13 Completed Copyright 2010 Consumer Data Industry Association 60

21 Reverse Mortgages Question: How should reverse mortgages be reported? Answer: Do not report reverse mortgages because the consumer has no credit obligation. Copyright 2010 Consumer Data Industry Association 61 Bankruptcy Chapter 13 Completed Question: How is a mortgage account reported when a consumer completes their payments through a Bankruptcy Chapter 13 plan, but the account is still open and the consumer is continuing to make payments? Answer: If the account is still open when the Chapter 13 plan payments have been completed, report Consumer Information Indicator Q to remove the previously-reported petition indicator so that ongoing payments made by the consumer can be reported. Copyright 2010 Consumer Data Industry Association 62 Questions can be submitted to the CDIA Metro 2 Format Task Force through CDIA at: metro2info@cdiaonline.org Copyright 2010 Consumer Data Industry Association 63

22 Credit Reporting Resource Guide Step 1: To download a copy of the Credit Reporting Resource Guide, please go to: Step 2: Enter the user name & password combination, given to you during the presentation. Step 3: Fill out the Metro 2 Access form. Step 4: Check your . You will receive an from info@cdiaonline.org with subject line Metro2 Access Approved. The will provide you with a link and your individual login combination to download the guide. If the does not include a login combination, please use your existing CDIA login info. If you do not know your CDIA login, you may use the password recovery function, by going to: Copyright 2010 Consumer Data Industry Association 64 Thank you for attending! Copyright 2010 Consumer Data Industry Association 65