HMDA Filing Update. The webinar will begin at the top of the hour. You may download the presentation at:

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1 HMDA Filing Update The webinar will begin at the top of the hour. ou may download the presentation at:

2 HMDA Filing Update Thank you for attending. The webinar has started.

3 Housekeeping Asking Questions Downloading Materials QuestSoft.com/HMDAUpdate Technical Difficulties GoToMeeting Support (877) Disclaimer!

4 Disclaimer The contents of this webinar are for informational purposes only and do not constitute legal advice. This webinar and its associated material should not be regarded as a substitute for detailed advice regarding individual laws and regulations. Transmission of this information is not intended to create -- and receipt does not constitute a lawyer-client relationship between you and QuestSoft or the participants of this webinar. Furthermore, the opinions expressed here do not constitute legal advice and should not be construed as such.

5 Today s Panelists Loretta Kirkwood Vice President, Compliance QuestSoft Corporation Leonard Ryan President QuestSoft Corporation Moderator Scott Mortenson Marketing Director QuestSoft Corporation

6 CFPB HMDA Revisions, Updates and Recommendations Tuesday, January 8, 2019 Wednesday, January 9, 2019 Loretta Kirkwood Vice President, Compliance

7 Resources CFPB Resources Tools Filing Instructions Guide (FIG) Submission New Site for QuestSoft Resources Submission Central Submission Instructions

8 HMDA Filing Platform Login or Create an Account Upload HMDA Data in Pipe Delimited Text File Checks Formatting Test Now! System will Identify Errors Immediately Syntactical, Validity, Quality, Macro Errors will Need to be Corrected at the Source Level Then, Upload a Corrected Text File Authorized Representative Must Certify Data Click Submit

9 HMDA Filing Platform

10 Submission Tips CFPB Registration our institution MUST have an LEI before you can use the HMDA Platform Do NOT create a new account - If you registered in 2017 or on the 2018 Beta site, use the same credentials Upload Errors Do not close the browser while the file is uploading If corrected data is not overwriting your original file, clear browser s cache Agency Errors Non-depositories are 7/HUD regulated unless affiliated with a 9/CFPB regulated financial institution Edits Syntactical and Validity Edits must be Cleared Quality Edits must be Verified

11 Submission Challenges Quality Edits Limited concern for 2018 submission Not all edits are being triggered correctly Edit ID Condition Fail Q607 Lien Status = 2 Loan Amount > $250,000 Q615 Total Loan Costs & Origination Charges NA or Exempt Total Loan Costs < Origination Charges Q615 Total Points and Fees & Origination Charges NA or Exempt Total Points and Fees < Origination Charges Q616 Total Loan Costs & Discount Points NA or Exempt Total Loan Costs < Discount Points Q616 Total Points and Fees & Discount Points NA or Exempt Total Points and Fees < Discount Points Q637 Macro Action Taken = 5 / Incomplete > 15% of total applications

12 Submission Challenges Complicated Guidance Field Challenge Condition Combined Loan-to-Value (CLTV) Q617 triggered for FHA VA Calculation uses base loan amount not total amount financed Credit Score of Co-Applicant or Co-Borrower Name and Version of Credit Scoring Model 8888/Not Applicable If Action Taken = 4, 5, or 6, must = 8888 regardless of whether or not there is a co-applicant 9 / Not Applicable If Action Taken = 4, 5, or 6, must = 9 regardless of whether or not there is a co-applicant

13 Submission Challenges S.2155 Partial Exemption Insured depository institutions and credit unions ONL ORIGINATED fewer than 500 loans in each of the two (2) preceding calendar years separate tests: Closed-End Mortgage Loans Open-End Lines of Credit Data Fields 110 Total 57 Required 53 Exempt / Optional S.2155 Implementation Webinar (Nov 2018) -

14 CFPB - HMDA Errors No resubmission or assessment of penalties for 2018 HMDA Unless data errors are material* Recognizes significant systems and operational challenges Provides lenders opportunities for future years: Identify gaps Improve HMDA compliance management Examinations Diagnostic Help identify weaknesses Credit for good-faith compliance efforts *NOT a free pass

15 HMDA Public Disclosure Final Policy Guidance - 12/21/ _Final_ _for_website_with_date.pdf Executive Summary olicy_guidance.executive_summary.final pdf HMDA Public Data

16 HMDA Public Disclosure Excluded from Public Disclosure Data Point Data Field S.2155 ULI / NULI ULI / NULI Application Date Application Date Action Taken Date Action Taken Date Property Address Street Address City, Zip Code Credit Score App/Bor: Credit Score Co-App/Co-Bor: Credit Score App/Bor: Name and Version of Credit Scoring Model: Conditional Free Form Text Co-App/Co-Borr: Name and Version of Credit Scoring Model: Conditional Free Form Text Mortgage Loan Originator NMLSR Mortgage Loan Originator NMLSR Automated Underwriting System (AUS) AUS - Conditional Free Form Text AUS System Result 1-5 AUS System Result Conditional Free Form Text Race App/Bor: Race Conditional Free Form Text Code 1 App/Bor: Race Conditional Free Form Text Code 27 App/Bor: Race Conditional Free Form Text Code 44 Co-App/Co-Bor: Race Conditional Free Form Text Code 1 Co-App/Co-Bor: Race Conditional Free Form Text Code 27 Co-App/Co-Bor: Race Conditional Free Form Text Code 44 Ethnicity App/Bor: Ethnicity Conditional Free Form Text Co-App/Co-Bor: Ethnicity Conditional Free Form Text Reason for Denial: Conditional Free Form Text Denial Reasons

17 HMDA Public Disclosure Modified Value / Reduced Precision Data Point Data Field Modification S.2155 Loan Amount Loan Amount - Midpoint for $10,000 interval - Indication of whether loan amount exceeds GSE conforming loan limit Age App/Bor: Age Co-App/Co-Borr: Age - Binned values <25, 25-34, 35-44, 45-54, 55-64, 65-74, >74 - Indication of whether value is 62 or higher Debt-to-Income Ratio Debt-to-Income Ratio - Binned values <20%, 20% to <30%, 30% to <36%, 50% to <60%, 60% or higher - Values 36% to < 50% Property Value Property Value - Midpoint for $10,000 interval Total Units Total Units - Binned values 5-24, 25-49, 50-99, , >149 - Values < 5 Multifamily Affordable Units Multifamily Affordable Units - Values reported as a percentage to the nearest whole number

18 HMDA Public Disclosure Field Value Data Point / Data Field S.2155 Legal Entity Identifier (LEI) Loan Type Loan Purpose Preapproval Construction Method Occupancy Type Action Taken Location / State + County + Tract State Income Type of Purchaser Rate Spread HOEPA Status Lien Status Data Point / Data Field S.2155 Origination Charges Discount Points Lender Credits Interest Rate Prepayment Penalty Term Combined Loan-to-Value Ratio Loan Term Introductory Rate Period MH Secured Property Type MH Land Property Interest Reverse Mortgage Open-End Line of Credit Business or Commercial Purpose

19 HMDA Public Disclosure Field Value Data Point Data Field S.2155 Ethnicity App/Bor: Ethnicity 1 5 App/Bor: Visual Observation or Surname Co-App/Co-Borr: Ethnicity 1 5 Co-App/Co-Bor: Visual Observation or Surname Race App/Bor: Race 1 5 App/Bor: Visual Observation or Surname Co-App/Co-Borr: Race 1 5 Gender Credit Score Co-App/Co-Bor: Visual Observation or Surname App/Bor: Gender App/Bor: Visual Observation or Surname Co-App/Co-Borr: Gender Co-App/Co-Bor: Visual Observation or Surname App/Bor: Name and Version of Credit Scoring Model Co-App/Co-Bor: Name and Version of Credit Scoring Model Denial Reasons Reason for Denial 1 4 Total Loan Costs / Total Points and Fees Total Loan Costs Non-Amortizing Features Application Channel Total Points and Fees Balloon Payment Interest Only Payments Negative Amortization Other Non-Amortizing Features Submission of Application Initially Payable to our Institution Automated Underwriting System (AUS) Automated Underwriting System 1-5

20 Submitting our HMDA With Compliance RELIEF Tuesday, January 8, 2019 Wednesday, January 9, 2019 Leonard Ryan President

21 ear-end Features for Compliance RELIEF Features: - Over 100 additions and changes to software since October update. - New Updates to FFIEC Demographic Tables - 58 data points added for additional analysis features later this year. - New Sample Databases Using Expanded Data - LOS Import Adjustments

22 Technical Support Calls in First Week of 2019 Most Popular Support Calls: - Activation of 2019 or Licensed Features - Can t Download 2018 Submission Version - Most likely an accounting issue. - Didn t Get an About the ear-end Version - ou probably need to get added to our alert list. - Trying to Submit with Validity Errors - All errors on the Compliance RELIEF side will be present when you try to submit to the CFPB and your submission will be rejected. - Legitimate Compliance RELIEF Bugs To be fixed in next release scheduled for next week. - V Credit Scores Higher than 850. The value is saved correctly. - V608-2 is firing erroneously at loan level even when customers aren t exempt.

23 S.2155 Exemption Reminders View of a Record with Exemptions Applied Features: - Exempt View or Data View allows you to view for submission value or for use with fair lending or other analysis. - In Exempt View, exempted fields display submitted value vs. actual value. - NULI replaces ULI and uses Application/Loan No. unless you select ULI to voluntarily report. - CFPB HMDA Error Codes removed for exempted fields.

24 ear-end S.2155 Changes ear-end Enhancements: - Separate exempt statuses are now selectable for Closed-End Loans and/or Open-End LOC. - Loan Records screen automatically defaults based on voluntary selections and NULI vs. ULI. - Group Edits restored that allow a universal adjustments from the beginning of the year for NULI s. - Quality Errors related to incorrect property address attributes are suppressed unless address is voluntarily reported. - Q622 is now suppressed if institution is exempt and the Reverse Mortgage data point is not being reported.

25 Importing With a S.2155 Partial Exemption A Word About Imports Our Advice to Customers and Vendors: - Please have your LOS/POS/Doc Vendor export EVERTHING to us as they would a non-exempt lender. Reasons: - ou will not be able to change exemption selections prior to submitting based on analysis if the vendor export is restricted. - Exemption codes for fields such as Property Address, City and Zip Code will cancel out your ability to geocode, research or re-verify the accuracy of your geocoding. - Automation and analysis will be restricted. - If we receive data in some fields and exempt codes in others, that helps identify internal issues. - ou will not be able to accommodate regulator requests or perform an accurate fair lending self-analysis if data is restricted.

26 More Information on S.2155 Webinar Held October 3, 2018 Free Download for Customers

27 Using Compliance RELIEF The Super Basics That Help Most New Users Main Screen: - Ordered by years - Current back to Activated products in Color. - Social media at bottom is free, included and useful. - First Use Ever: - Security, Setup, then Preferences. - After that, click on module to use. - First Use in Any Calendar ear: - Go into Preferences and every module you use B EAR. - Copy previous year selections then make changes as needed.

28 Using Compliance RELIEF The Super Basics That Help Most New Users Navigating Module Screens: 1. Top Bar Selections Use Left to Right A. Dashboard, Import, Automated Geocoding, Group Edits, Manual Corrections in Loan Records, Submit 2. Left Bar Options Up/Down by Section A. Loan Records Testing/Statistics i. Look at Filters/Options/Views B. DuplicateRecords Most Intense Area C. Reports work Opposite 3. Action Buttons 4. The Help Button

29 Importing Imports Are Our Primary Source of Technical Support Calls - We have 61 Import Options 52 LOS plus 9 General File Formats. - Make sure you have all of your LOS programs used IN THE SUBMISSION EAR selected. - All LOS systems changed formats for CFPB HMDA several made changes within the last month due to S First year of the new HMDA give yourself plenty of time for surprises. - Remember our Help System (the button with the question mark).

30 LOS Considerations LOS Vendors with New Procedures - Ellie Mae Encompass - New Report Update file to accommodate latest changes made in mid-december needs to be uploaded into Encompass. - Finastra - Compliance Reporter required for all Finastra products in Several options exist for Other Systems Some export only CFPB format. Issue will be analysis, cross-checks and fair lending.

31 Specification and Error Code Changes (Ver 1.2) Specifications The QuestSoft import specifications have been updated, available on The updates include: CASH_OUT (NMLS) 8/15/2018 Updated label and description "Purpose of Refinance" for clarity. OCCUPURLA (NMLS) 8/15/2018 Required field for both Standard and Expanded MCR. CAPRACE (HMDA) 8/15/2018 Updated enumeration description 8. CLTV (HMDA) 9/12/2018 Updated format to allow up to 5 decimal places. COMB_RATIO (HMDA) 9/12/2018 Updated format to allow up to 5 decimal places. CRA Sample sheet (CRA) 10/11/2018 Included LNPURPOSE column. Error Codes The following updates and additions have been added to Validity Errors, QuestSoft Errors, and Group Edits. Updates: V660-1 Update condition to trap additional invalid data entry V665-1 Update condition to trap additional invalid data entry New QuestSoft optional Quality Errors (Also Group Edits); QS616 Total Units > 4 and Occupancy not 3 (Investment Property) QS658-1 Total Units > 4 and HOEPA <>3 QS658-2 Reverse Mortgage and HOEPA <> 3 QS658-3 Business/Commercial and HOEPA <> 3 Group Edits Were Also Adjusted in the Latest Version

32 CFPB Submissions Tips for our 2018 Data Submission (due by March 1, 2019) - Unless you are super big and just did a test, keep the checkmark on the Perform Complete Retest before submission. - Make sure you have all errors corrected (a green pie chart on the HMDA dashboard) or you will be disappointed. - ou have to in order to submit. - The Link to Submit is

33 What if My Examiner Wants Data? Use Import/Export, Export CFPB DO NOT Use Submit - Far more options with this section: - Restrict Action Types, Lending Channel. - If a State Examiner, you can restrict to loans in that State or other criteria. - If Federal Examiner, you can set Action Date Range for mid-year exports. - ou can enter Addresses and have file automatically attached.

34 CFPB Changes in 2019 vs Credit Provider and AUS Decision 2019 Credit Score Provider description adjustments: 2 - Experian Fair Isaac Risk Model v2 3 - TransUnion FICO Risk Score Classic TransUnion FICO Risk Score Classic Additional options for AUS decisions 1-5: 18 Accept/Eligible 19 Accept/Ineligible 20 Accept/Unable to Determine 21 Refer with Caution/Eligible 22 Refer with Caution/Ineligible 23 Refer/Unable to Determine 24 - Refer with Caution/Unable to Determine Error Codes Updated Validity/Quality edits for 2019: - Q609 (Description only): If Type of Purchaser equals 1-4, then Rate Spread generally should be <= 10% or be NA. - V677-1: Interest Rate must be a number greater than or equal 0, or NA, and cannot be left blank - Q632: AUS reported as 3-TotalScoreCard and result not 1, 2, 3, 4, 8, 13, 18, 19 or 16 - Q633: AUS reported as 4-GUS should have a result of 3, 4, 10, 15, 18, 19, 20, 21, 22, 23, 24 or 16 - Q643-1: An AUS Type = 1 DU and corresponding result not 1-7, 15 or 16 - Q644-1: An AUS Type = 2 LP and corresponding result not 8-13 or 16 - Q645-1: Loan Amount should generally be greater than or equal to $500 (reported 500) - Q645-2: If Loan Purpose equals 1, then Loan Amount should generally be greater than or equal to $1,000 (reported 1000)

35 QuestSoft s Investments in ear 2019 Planned Modules and Features - Fair Lending RELIEF - Updated Dashboards - Expanded Analysis Reports in All Modules - More Fields in Market Data - Enhanced Geocoding Options - Aid in verifying accuracy - More Mapping Features - More Features integrated Directly into LOS Platforms

36 Changes to Instant HMDA and Compliance EAGLE

37 Changes to Instant HMDA and Compliance EAGLE All Updates for S.2155 Have Been Made and Are on the Street Instant HMDA Review to be changed to move exempted fields into a new category. Note: Ellie Mae Encompass released a new version of their HMDA exemptions that differed from earlier versions. They are now making changes to their interface with Instant HMDA to accommodate those changes. This should be ready for ear 2019 loans by late February.

38 Other Products to Assist With Accurate Data EAGLE and VERIF are currently used by over 500 Lenders for: - Instant Geocoder Integration into pricing and deposit applications - CRA Saleability Review Add Profits to our Compliance Program - Instant MCR For State Licensed Lenders - Flood PreCerts Save $$$ on PreQuals - Exclusionary List Automation - LEF Reviews For CFPB and RegulatorConnect/AARMR submissions - ALTA Registry - Mavent Reviews High Cost & Full - Verifications 4506-T, VOE, VOA, VOI, SSA-89, Fraud Investigations

39 Products and Services

40 QuestSoft Webinar Series Rescheduled until after the HMDA Submission Deadline. Expanded HMDA = Expanded Fair Lending Risk Wednesday, March 5, AM Pacific Register at:

41 Questions? Loretta Kirkwood Vice President, Compliance QuestSoft Corporation (949) Leonard Ryan President QuestSoft Corporation (949) ou can enter your question in the GoToWebinar application box in the Questions section. If we can t get to your question during this session, we will create a Q & A document with all the questions and answers for your review. For information on products referenced during this presentation, contact QuestSoft at option 1 or visit

42 Thanks for joining us today! Now it s time to make compliance relaxing For more information on solutions, call (800) option 1 or visit us at ou can download this presentation at: