Home Mortgage Disclosure Act HMDA Part 1. Presented by: Aaron Kouhoupt, Esq.

Transcription

1 Home Mortgage Disclosure Act HMDA Part 1 Presented by: Aaron Kouhoupt, Esq.

2 Timeline January 1, 2018 Coverage and collection of expanded data required under new rule (Be careful!) March 1, 2019 Report the new expanded data collected under new rule 2

3 Coverage Institutional January 1, 2018 Originated at least 25 covered closed end mortgage loans in each of the preceding 2 years; or Originated at least 100 covered open end lines of credit in each of 2 preceding years; and Meets current asset-size, location and activity tests 3

4 Coverage Transactional Dwelling secured standard Closed end secured by a dwelling Open end secured by a dwelling Dwelling secured business purpose loans and lines of credit if home purchase, home improvement, or refinancing 4

5 Transactional Dwelling secured standard Consumer Closed end mortgage loan Extension of credit Secured by a dwelling and Not an open end Open end line Extension of credit Secured by a dwelling Open end plan under Z 5

6 Transactional Dwelling secured standard (cont.) Is the loan a closed end mortgage or an open end line of credit? If yes; keep going If not; it is not a covered loan If Yes Is the closed end mortgage or open end line an excluded transaction? If yes; it is not a covered loan For visual aid: Consumer Financial Protection Bureau CFPB Quick References: 2018 HMDA transactional coverage chart 6

7 Transactional Dwelling secured standard (cont.) Excluded transaction Secured by unimproved or vacant land Unless the bank knows at the time of application or while making credit decision that the proceeds will be used within 2 years to construct or purchase a dwelling to be placed on the land Mortgage or Open end line that is primarily business or commercial unless Home improvement Home purchase Refinance 7

8 Transactional Preapprovals Definition Home purchase Not secured by multifamily Not for open end or reverse and Reviewed under a preapproval program Comprehensive analysis of creditworthiness Written commitment with only specifically permitted conditions Suitable property No material change to creditworthiness and Traditional loan closing conditions 8

9 Reportable Data New & Expanded Data Points Effective for action taken on or after January 1, If application is taken in 2017 but final action taken is in 2018 the new data points are required New expanded GMI options to match census Disclosure that FI is required to use visual observation or surname if no choice is selected If Bank has to choose they can use aggregated categories 9

10 Reportable Data - Modified GMI If applicant starts application not face to face and leaves blank FI must request the information if they later meet with borrower face to face (unless application process is already complete) Timing exception Can report the GMI collected at time of application (2017) not at final decision (if 2018) 10

11 Reportable Data - Modified Reason for denial is required Loan Amount no longer rounded Occupancy type be careful! Property location Construction method Loan Purpose Action Taken 11

12 Reportable Data - New Application Channel Property Total units Multifamily affordable units Applicant information Debt to income Credit score Automated system? Result? 12

13 Reportable Data - New TRID loans (taken straight from CD) Total loan costs Origination charges Discount points Lender credits 13

14 Challenges System updates and testing Collect what data you can early! Retraining understanding of current data points Train on new data points Review, Review, Review for Fair Lending!! 14

15 Aaron Kouhoupt, Esq. SVP, Senior Regulatory Counsel Bangor Savings Bank 15

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