HMDA Demographic Information Addendum Policy & Procedure

Transcription

1 HMDA Demographic Information Addendum Policy & Procedure April 18, 2018

2 1. Overview The Home Mortgage Disclosure Act (HMDA), which is implemented as Regulation C, requires lenders to collect and publicly disclose data about their mortgage loans on an annual basis. The purpose of HMDA is to provide the public with information that will: Show whether a lender is serving the housing credit needs of its communities; Aid public officials in distributing public-sector investment to attract private investment to areas where it is needed; and Assist in identifying possible discriminatory lending patterns and enforcing anti-discrimination statutes. It is the policy of loandepot.com, LLC, and its divisions (the Company ) to adhere to all requirements set forth by HMDA and Regulation C. 2. HMDA Demographic Data The expanded requirements for ethnicity, race, sex, and age are a significant change, effective with the new HMDA requirements. Fannie Mae and Freddie Mac released a new form, Demographic Information Addendum () to the Uniform Residential Loan Application (URLA), specifically for collection of the expanded demographic data. LDW loans with applications dated prior to 1/1/18 AND HMDA action dates on 1/1/18 or after are required to report new HMDA data EXCEPT for new Demographic Data (formerly Government Monitoring Data). Government Monitoring Data (GMI) may be reported even if the new Demographic Data was provided. LDW loans with applications dated 1/1/18 or greater AND HMDA action dates of 1/1/18 or after are required to report ALL new HMDA data, including the new Demographic Data on the new Addendum form. Instructions for Collecting Demographic Data Collection on Ethnicity, Race, and Sex on the new Addendum form Broker Requirements For all applications, whether the application is taken in person, by mail or telephone, or on the internet: o Broker is required to ask the applicant for this information (but cannot require the applicant to provide it). o Broker is required to inform the applicant that Federal law requires this information to be collected in order to protect consumers and to monitor compliance with Federal statutes that prohibit discrimination against applicants on these bases. o Borrower(s) name must be present in the space provided on the bottom of the form For applications taken by telephone: o Broker must read the information in the collection form orally, except for that information which pertains uniquely to applications taken in writing, for example, the italicized language in the data collection form. o If the applicant declines to provide this information by stating orally that he or she does not wish to provide this information on an application that is taken by telephone, broker must check the box I do not wish to provide this information in each applicable category on the Demographic Information form o If the applicant begins an application by telephone, and does not provide the requested information on the application but does not check or select the I do not wish to provide this information box on the application, AND the applicant meets in person with you to complete the application, broker must request the applicant's ethnicity, race, and sex. If the applicant does not provide the requested information during the in-person meeting, broker must collect the information on the basis of visual observation or surname. If the meeting occurs after the application process is complete, for example, at closing or account opening, broker is not required to obtain the applicant's ethnicity, race, and sex. o When an applicant provides the requested information for some but not all fields, broker must report the information that was provided by the applicant, whether partial or complete. If an applicant provides partial or complete information on ethnicity, race, and sex and also checks the I do not wish to provide this information box on an application that is taken by mail or on the internet, or makes that selection when V.E Page 2

3 applying by telephone, broker must report the information on ethnicity, race, and sex that was provided by the applicant. o When an applicant provides the requested information for some but not all fields, broker must report the information that was provided by the applicant, whether partial or complete. If an applicant provides partial or complete information on ethnicity, race, and sex and also selects I do not wish to provide this information on an application that is taken by telephone, broker must report the information on ethnicity, race, and sex that was provided by the applicant. For applications taken in person: o Broker Inform the applicant that if the information is not provided where the application is taken in person; the broker is required to note the information on the basis of visual observation or surname. o If the applicant chooses not to provide the information for an application taken in person, broker must note this fact on the collection form and then collect the applicant's ethnicity, race, and sex on the basis of visual observation or surname. Broker must report whether the applicant's ethnicity, race, and sex was collected on the basis of visual observation or surname. When broker collects an applicant's ethnicity, race, and sex on the basis of visual observation or surname, they must select from the following aggregate categories: Ethnicity (Hispanic or Latino; not Hispanic or Latino); race (American Indian or Alaska Native; Asian; Black or African American; Native Hawaiian or Other Pacific Islander; White); sex (male; female). For applications taken by mail or internet: o If the applicant declines to answer these questions by checking the I do not wish to provide this information box on an application that is taken by mail or on the internet, broker must ensure that all the three (3) boxes are checked on the form o If the applicant begins an application by mail, internet and does not provide the requested information on the application but does not check or select the I do not wish to provide this information box on the application, AND the applicant meets in person with you to complete the application, broker must request the applicant's ethnicity, race, and sex. If the applicant does not provide the requested information during the in-person meeting, broker must collect the information on the basis of visual observation or surname. If the meeting occurs after the application process is complete, for example, at closing or account opening, broker is not required to obtain the applicant's ethnicity, race, and sex. o When an applicant provides the requested information for some but not all fields, broker must report the information that was provided by the applicant, whether partial or complete. If an applicant provides partial or complete information on ethnicity, race, and sex and also checks the I do not wish to provide this information box on an application that is taken by mail or on the internet, broker must report the information on ethnicity, race, and sex that was provided by the applicant. For applications taken through electronic media with a video component, the broker must treat the application as taken in person. For applications taken through electronic media without a video component (for example, facsimile), broker must treat the application as accepted by mail. If the application includes a guarantor, the broker does not report the guarantor's ethnicity, race, and sex. If there are no co-applicants, the broker must report that there is no co-applicant. If there is more than one co-applicant, the broker must provide the ethnicity, race, and sex only for the first coapplicant listed on the collection form. o A co-applicant may provide an absent co-applicant's ethnicity, race, and sex on behalf of the absent coapplicant. o If the information is not provided for an absent co-applicant, broker must report information not provided by applicant in mail, internet, or telephone application for the absent co-applicant. o Broker must report that the requirement to report the applicants or co-applicant's ethnicity, race, and sex is not applicable when the applicant or co-applicant is not a natural person (for example, a trust). For a transaction involving a trust, broker must report that the requirement to report the applicant's ethnicity, race, and sex is not applicable if the trust is the applicant. On the other hand, if the applicant is a natural person, and is the beneficiary of a trust, broker must report the applicant's ethnicity, race, and sex. Categories and Subcategories - General: V.E Page 3

4 o o o o o Broker must report the ethnicity, race, and sex of an applicant as provided by the applicant. For example, if an applicant selects the Mexican box the broker reports Mexican for the ethnicity of the applicant. If an applicant selects the Asian box the broker reports Asian for the race of the applicant. o Only an applicant may self-identify as being of a particular Hispanic or Latino subcategory (Mexican, Puerto Rican, Cuban, Other Hispanic or Latino) or of a particular Asian subcategory (Asian Indian, Chinese, Filipino, Japanese, Korean, Vietnamese, Other Asian) or of a particular Native Hawaiian or Other Pacific Islander subcategory (Native Hawaiian, Guamanian or Chamorro, Samoan, Other Pacific Islander) or of a particular American Indian or Alaska Native enrolled or principal tribe. o Broker must offer the applicant the option of selecting more than one ethnicity or race. If an applicant selects more than one ethnicity or race, broker must report each selected designation, subject to the limits described below. Ethnicity - Aggregate categories and subcategories: There are two aggregate ethnicity categories: Hispanic or Latino; and Not Hispanic or Latino. If an applicant selects Hispanic or Latino, the applicant may also select up to four ethnicity subcategories: Mexican; Puerto Rican; Cuban; and Other Hispanic or Latino. Broker must report each aggregate ethnicity category and each ethnicity subcategory selected by the applicant. Ethnicity other subcategories: If an applicant selects the Other Hispanic or Latino ethnicity subcategory, the applicant may also provide a particular Hispanic or Latino ethnicity not listed in the standard subcategories. In such a case, broker must report both the selection of Other Hispanic or Latino and the additional information provided by the applicant. Race Aggregate categories and subcategories: There are five aggregate race categories: American Indian or Alaska Native; Asian; Black or African American; Native Hawaiian or Other Pacific Islander; and White. The Asian and the Native Hawaiian or Other Pacific Islander aggregate categories have seven and four subcategories, respectively. The Asian race subcategories are: Asian Indian; Chinese, Filipino; Japanese; Korean; Vietnamese; and Other Asian. The Native Hawaiian or Other Pacific Islander race subcategories are: Native Hawaiian; Guamanian or Chamorro; Samoan; and Other Pacific Islander. Broker must report every aggregate race category selected by the applicant. If the applicant also selects one or more race subcategories, broker must report each race subcategory selected by the applicant. Race other subcategories: If an applicant selects the Other Asian race subcategory or the Other Pacific Islander race subcategory, the applicant may also provide a particular Other Asian or Other Pacific Islander race not listed in the standard subcategories. In either such case, broker must report both the selection of Other Asian or Other Pacific Islander, as applicable, and the additional information provided by the applicant. V.E Page 4

5 Demographic Information Addendum Example Minimum fields highlighted in yellow V.E Page 5

6 LOAN SETUP - DEMOGRAPHIC DATA VALIDATION AT SUBMISSION At the time the file is submitted to Loan Setup, the Loan Setup (LSU) Analyst will verify that a completed Demographic Information Addendum () is present in the file. If Addendum is not present, or is present but not properly completed, the LSU Analyst will place the submission on hold and not accept the application until a properly completed Addendum is received Addendum is considered complete if the following (minimum) data is present: o Categories minimum three (3) boxes are checked as follows: one (1) selection in Ethnicity, Race and Sex I do not wish to provide this information is a valid selection o The To Be Completed by Financial Institution section is required for applications taken in person o The Demographic Information was provided through: section is required for all applications When LSU accepts the application and sends to Underwriting, the UW Admin, or Correspondent Liaison, will validate that the data in Empower (from the Broker/Lender s loan import) matches the HMDA data from the initial 1003 provided from the Broker/Lender (that was signed by the applicant) match each other. V.E Page 6