HMDA: Haven or Havoc. Cindy Prince, Presenter December 5, 6 & 7, 2017 Assisted by Rachelle Dekker and Matt Goble

Transcription

1 HMDA: Haven or Havoc Cindy Prince, Presenter December 5, 6 & 7, 2017 Assisted by Rachelle Dekker and Matt Goble

2 Agenda Day One 1. Effective dates 2. Overview of reporting requirements Annual expectations Two proposals and a new final rule 3. Key definitions 4. Reportable and Excluded Transactions 5. Categories of data 54 Data Elements How we organized the data Explanation of each data element

3 About the Speaker Cindy Prince is a Senior Compliance Advisor with the Temenos Compliance Advisory team. Cindy brings over 25 years of banking experience to the team, which includes 14 years of experience as a Compliance Officer and Advisor. Her career has also focused on risk management, training and audit. Cindy also held the position of Internal Auditor for (7) years at a community bank. Cindy is a Certified Regulatory Compliance Manager (CRCM) and is also a NAFCU Certified Compliance Officer (NCCO). Cindy was recently invited to the CFPB headquarters in Washington where she attended a LIVE demonstration of the CFPB s new HMDA Platform.

4 Assisting With The Presentation Rachelle Dekker is a Senior Compliance Advisor with the Temenos Compliance Advisory team. Her background is specialized in BSA/AML, HMDA, and deposit compliance. Rachelle graduated from Grand Valley State University with her Master of Science in Accounting. She is also a Certified Regulatory Compliance Manager (CRCM). Matt Goble is also a Senior Compliance Advisor for the Temenos Compliance Advisory team. Matt advises over 700 institutions on federal regulatory compliance, specializing in TRID, E-Sign and Loan Origination Compensation. Matt was formerly the Compliance Officer for a large community bank.

5 Effective Dates Effective January 1, 2018 New reporting definition Uniform loan volume thresholds New coverage definition Collect new/updated data elements Report 2017 data via CFPB HMDA Platform (due March 1, 2018) Disclosure Statement requirement modified (lobby notice and CRA file) Let the real fun begin???

6 Effective Dates Effective January 1, 2019 Appendix A removed from regulation due to Federal Reserve Board reference Report new/updated data elements using the CFPB s revised procedures and electronic submission tool Effective January 1, 2020 Quarterly reporting for large institutions

7 Overview 2018 Reporting threshold for all financial institutions Originate 25 or more covered closed-end mortgage loans in each of the past two calendar years; - OR - Originate 500 or more covered open-end lines of credit in each of the past two calendar years* New data elements as well as changes to existing data elements 2017 data reported via CFPB s HMDA Platform (March 1, 2018) * Remember, this is a temporary increase and will return to the 100 threshold in 2020.

8 Overview 2019 Disclosure Statement upon request no longer required Provide notice that disclosure statement and modified LAR are available on the CFPB s website Model language for both CRA Public File and lobby notice* included in Final Rule Submit the new dataset electronically on March 1, 2019 Web-based submission tool and revised procedures available at Home Mortgage Disclosure Act Notice The HMDA data about our residential mortgage lending are available online for review. The data show geographic distribution of loans and applications; ethnicity, race, sex, age, and income of applicants and borrowers; and information about loan approvals and denials. HMDA data for many other financial institutions are also available online. For more information, visit the Consumer Financial Protection Bureau's Web site ( *Lobby notice in scroll above

9 Overview 2020 Require certain large institutions to file reports quarterly Report at least 60,000 loans annually All institutions must have data current within 30 days of each calendar quarter close Loan Volume Threshold for open-end lines of credit will decrease from 500 in prior two years to 100

10 CH-CH-CHANGES Final rule published October 15, 2015 Amendment published on April 15, 2017 Clarified certain key terms such as temporary financing and automated underwriting system Established transition rules for reporting certain loans purchased by financial institutions. Facilitated reporting census tract information using new CFPB geocoding tool Would allow voluntary reporting in order to allow for consistent practices Two proposed exclusions: construction-only for sale and loans in advance on NY CEMA Comment Period ended May 25, 2017

11 Where did we land? Amendment published July 14, 2017 Increased open-end lines of credit threshold from 100 to 500 for 2018 and 2019 Comment Period ended July 31, 2017 Issued the 2017 HMDA Final Rule on August 24, 2017 Combines both proposals and added several provisions or clarifications

12 2017 HMDA Final Rule Temporarily raises thresholds for open-end lines of credit from 100 to 500 covered loans Must meet threshold in both 2016 and 2017 in order to be reporter in 2018 Returns to 500 covered loans on January 1, 2020 unless extended at that time Allows reporting NA for property location if information is not known at time final action is taken Example: property did not have an address at closing Example: applicant did not provide property address before application was denied, withdrawn, or closed for incompleteness Allows reporting NA for Loan Purpose for purchased loans originated prior to January 2, 2018 Clarifies when error in reporting incorrect census tract information is not violation Used CFPB geocoding tool Entered accurate address Tool returned inaccurate census tract

13 2017 HMDA Final Rule Defines Automated Underwriting System (AUS) An electronic tool that has been developed by a securitizer, Federal government insurer, or a Federal government guarantor of closed-end mortgage loans or open-end lines of credit Must provide a result regarding both the credit risk of the applicant and the eligibility of the covered loan to be originated, purchased, insured, or guaranteed by the securitizer, Federal government insurer, or Federal government guarantor that developed the system being used to evaluate the application Clarifies that a person may be a securitizer, Federal government insurer, or Federal government guarantor even if not active at the time the AUS is used Provides explicitly that a loan secured by five or more separate dwellings in more than one location is NOT a loan secured by a multifamily dwelling, as the proposal had sought to establish Allows voluntary reporting to allow lender operations to be consistent from year to year

14 2017 HMDA Final Rule Allows reporting NA for Mortgage Loan Originator NMLSR Identifier Purchased loans subject to 12 CFR (g) originated prior to January 10, 2014 Purchased loans NOT subject to 12 CFR (g) originated prior to January 1, (g): Consumer purpose loans secured by a dwelling Provides that financial institutions should NOT include as income amounts considered in making a credit decision based on factors in addition to income Amounts derived from underwriting calculations of potential annuitization or depletion of applicant s remaining assets Provides that financial institutions SHOULD include as income actual distributions from retirement accounts or other assets relied on as income Clarifies 3 aspects of demographic collection for race and ethnicity. Hold that thought!

15 Key Definitions Dwelling: a residential structure, whether or not attached to real property Clarifies when dwelling no longer used as residence includes but is not limited to: detached home, Homes converted for commercial purposes, such as a daycare or professional office an individual condominium or cooperative unit, No RVs or houseboats, even if used as a residence a manufactured home or other factory-built home or Service or medical component Assisted living vs. nursing home a multifamily residential structure or community Determine primary use Mobile homes will only be referred to as manufactured homes (consistent with HUD)

16 Key Definitions Multifamily Dwelling A dwelling, regardless of construction method, that contains five or more individual dwelling units Additional information will also be required such as number of individual income-restricted units pursuant to Federal, State, or local affordable housing programs The following is NOT considered a Multifamily dwelling: Covered loan secured by five or more separate dwellings, which are not already considered multifamily dwellings, in more than one location (ex. consumer purpose loan secured by 5 single family dwellings; 3 of which are located on the same property/address and 2 are located at a different property/address) Covered loan secured by five or more separate dwellings that are located within a multifamily dwelling, but which is not secured by the entire multifamily dwelling (e.g., an entire apartment building or housing complex)

17 Key Definitions Home Improvement Loan A closed-end mortgage loan or an open-end line of credit that is for the purpose, in whole or in part, of repairing, rehabilitating, remodeling, or improving a dwelling or the real property on which the dwelling is located Must be secured by a dwelling Unsecured home improvement loans not reportable Mixed-use home improvement Loan or line of credit to improve commercial space in a multifamily dwelling is not a reportable home improvement loan Loan or line of credit to improve commercial space in a dwelling other than a multifamily dwelling is a reportable home improvement loan

18 Key Definitions Assumption A transaction in which an institution enters into a written agreement accepting a new borrower in place of an existing borrower as the obligor on an existing debt obligation, even if new borrower merely assumes the existing debt obligation and no new obligation is created Includes successor-in-interest transactions, in which individual succeeds prior owner as the property owner and then assumes the existing debt secured by the property Temporary Financing Loan or line of credit designed to be replaced by separate permanent financing extended by any financial institution to the same borrower at a later time

19 Key Definitions Extension of Credit Granting of credit pursuant to a new debt obligation Transaction which modifies, renews, extends, or amends without satisfying and replacing original debt obligation with new debt obligation is NOT extension of credit Automated Underwriting System (AUS) Electronic tool developed by a securitizer, federal government insurer, or federal government guarantor of closed-end mortgage loans or open-end lines of credit Must provide result regarding both credit risk of applicant and eligibility of covered loan to be originated, purchased, insured or guaranteed Person may be a securitizer if that person has ever securitized, provided Federal government insurance for, or provided a Federal government guarantee at any point in time

20 Application Quick Reference Guide What is an application

21 Reportable Transactions All dwelling-secured loans HELOCs and reverse mortgage Construction-only loans unless specifically for purpose of constructing dwelling for sell Commercial loans Home purchase, home improvement or refinance purpose New York CEMA transactions

22 Excluded Transactions Temporary Financing Construction only or line of credit extended only for constructing dwelling for sale Loans to builders Loan or line of credit designed to be replaced by separate permanent financing extended by any financial institution to the same borrower Home improvement loans not secured by a dwelling Any transaction providing new funds in advance of a consolidation as part of a CEMA Loan originated or purchased by financial institution acting in fiduciary capacity Loan secured by lien on unimproved land

23 Excluded Transactions Loan or application for which total dollar amount is less than $500 Purchase of partial interest in loan Purchase of an interest in pool of loans Purchase solely of right to service loans Purchase of loans as part of merger or acquisition, or as part of acquisition of all of assets and liabilities of branch office Loan used primarily for agricultural purposes Loan that is or will be made primarily for business or commercial purpose, unless a home improvement loan under (i), a home purchase loan under (j), or a refinancing under (p)

24 54 Data Elements

25 Categories of Data New 35 new elements to be collected Modified 12 revised from the current requirement No Change 7 remain the same

26 How We Organized The Data To Be Collected Parallels the Temenos HMDA Worksheet Leverages Reportable Data Element Grouping General Information Applicant Information Property Information Loan Information Our materials are designed for practical data collection Can be leveraged regardless of reporting format CFPB has published final reporting format Filing Instruction Guide (FIG) and Loan/Application Register (LAR) Formatting Tool

27 General Information: Application Date Date application was received OR date on application form Need not use same approach throughout Be consistent by routinely using one approach within particular division or for category of loans If reporting date shown on form and retaining multiple versions of form, report date shown on first form received that constitutes an application For application not submitted directly to institution, may report: Date application was received by party that initially received application, Date application was received by institution, or Date shown on application form For reinstated counteroffer (or reconsidered application that was denied, withdrawn, or closed for incompleteness) the reportable application date depends on how the request is treated: If treated as new transaction with new ULI, report date of request If not treated as new transaction and using previous transaction s ULI, report original application date

28 General Information: Preapproval Preapproval (Home Purchase) Preapproval requested Preapproval not requested Must be preapproval request for home purchase loan under preapproval program No more 3-N/A

29 General Information: Application Channel NEW! Whether or not application was submitted directly to institution If reporting actions taken by agent, agent is not considered institution If applicant contacted and completed application with broker or correspondent that forwarded application to institution for approval, application was NOT submitted directly to institution Whether or not obligation arising from loan or application was or would have been initially payable to institution Obligation is initially payable to institution if obligation is initially payable either on face of note or contract to institution that is reporting loan or application

30 General Information: Unique Identifiers NEW!

31 General Information: Unique Identifiers NEW! Legal Entity Identifier MLO s numeric NMLSR ID# 20-digit alphanumeric institution identifier Issued by: A utility endorsed by LEI Regulatory Oversight Committee; or A utility endorsed or otherwise governed by Global LEI Foundation (GLEIF) (or any successor of the GLEIF) after GLEIF assumes operational governance of global LEI system. Obtained from Global LEI Foundation website: "Not Applicable" if MLO is not required to obtain and has not been assigned NMLSR ID Ex. commercial lender "Not Applicable" if purchased loan subject to (g) and originated prior to January 10, 2014 "Not Applicable" if purchased loan NOT subject to (g) and originated prior to January 10, 2018 Universal Loan Identifier Unique number used to identify loan Must consist of up to 23 letters, numerals or combination of both Must not include any information that could be used to directly identify applicant or borrower Follows LEI and ends with check digit Report MLO s NMLSR ID#, regardless of whether he/she is required to obtain NMLSR ID for transaction being reported, such as commercial loan If more than one MLO associated with transaction, report NMLSR ID# of individual MLO with primary responsibility for transaction as of date of action taken

32 Calculating the Unique Identifier NEW! Step 1: Append ULI to LEI and using the chart in Table 1, replace each alphabetic character with the correct numbers to obtain all numeric values in the string. Step 2: After converting the combined string of characters to all numeric values, add two zeros to the rightmost positions Step 3: Apply the mathematical function mod=(n,97) where n= the number obtained in step 2 above and 97 is the divisor (the result is 60) OR Divide the numbers in Step 2 by / 97 = Truncate the remainder to three decimal points without rounding and multiply it by x 0.97 = Round this result to the nearest whole number. 60 is the result Step 4: Subtract the result in Step 3 from 98. If the result is one digit, add a leading 0 to make it two digits ( 98 is the number provided in the regulation; it is not a separately calculated number) =38 Step 5: The two digits in the result from Step 4 is the check digit. Append the resulting check digit to the rightmost position in the combined string of characters described in Step 1 above to generate the ULI. ULI = 10B X 939C5543TQA1144M999143X38

33 Applicant Information: Applicant/Co-Applicant Age NEW! Obtained from date of birth provided by applicant/co-applicant on application form Optional reporting for purchased loans No rounding

34 Applicant Information: Credit Score NEW!

35 Applicant Information: Credit Score NEW! If relying on multiple scores (e.g., by relying on scoring grid that considers each score separately without combining all into composite score): Report one of the credit scores relied on in making the credit decision. In choosing which credit score to report, need not use same approach throughout, but should be generally consistent (e.g., by routinely using one approach within a particular division or for a category of loans). More than one applicant and relying on a single credit score: Report that credit score for either the applicant or the first co-applicant. If the transaction involves more than one applicant and relying on separate credit scores for each applicant: Report the credit score relied on for the applicant and the credit score relied on for the first co-applicant

36 Applicant Information: Automated Underwriting System / Results New! AUS System AUS Results 1. DU 2. LP 3. Total Scorecard 4. GUS 5. Other 6. NA 1. Approve / Eligible 2. Approve / Ineligible 3. Refer / Eligible 4. Refer / Ineligible 5. Refer with Caution 6. Out of Scope 7. Error 8. Accept 9. Caution 10. Ineligible 11. Incomplete 12. Invalid 13. Refer 14. Eligible 15. Unable to Determine 16. Other 17. NA

37 Applicant Information: Automated Underwriting System / Results New! Report name of Automated Underwriting System (AUS) used to evaluate application and result generated by that AUS Electronic tool developed by a securitizer, Federal government insurer, or Federal government guarantor of closed-end mortgage loans or open-end lines of credit A person may be a securitizer, even if it is not actively securitizing, insuring or guaranteeing closed-end mortgage loans or open end lines of credit at the time a financial institution uses the AUS Report only if an AUS was used to evaluate application Must report regardless of whether intention is to sell loan or retain loan in portfolio For example, if an AUS developed by a private securitizer was used to evaluate an application but the loan was not sold, and, instead, was held in portfolio, the name of the AUS used to evaluate the application and the result generated by that system must be reported

38 Applicant Information: Automated Underwriting System / Results New! If more than one AUS is used to evaluate an application or if one AUS is used to evaluate an application but it generated multiple results, determine which AUS or AUS s and which result or results to report. To do so, use following steps in exact order they are presented below: 1. Determine whether an AUS used to evaluate application matches loan type reported for application or loan 2. If AUS matches loan type (such as TOTAL Scorecard for an FHA loan), determine whether only one result was obtained from that AUS. If only one result was obtained from AUS that matches loan type, report AUS that matches loan type and result obtained from that AUS 3. If AUS was not used that matches loan type or if more than one result was obtained from AUS that matches loan type, determine whether AUS used to evaluate application matches purchaser, insurer, or guarantor (if any) for loan 4. If AUS was used that matches purchaser, insurer, or guarantor (such as Desktop Underwriter for loan that Fannie Mae purchased), determine whether only one result was obtained from that AUS. If only one result was obtained from AUS that matches purchaser, insurer, or guarantor, report AUS that matches and the result obtained from that AUS 5. If an AUS was not used that matches purchaser, insurer, or guarantor or multiple results were obtained from an AUS that matches purchaser, insurer, or guarantor or loan type, report result obtained closest in time to credit decision and AUS that generated that result, unless multiple results were obtained closest in time to credit decision 6. If multiple results are obtained simultaneously closest in time to credit decision, report each of the multiple AUSs that generated each of those results, up to a total of five AUSs For example, institution obtains multiple results closest in time to the credit decision if it obtains two results at noon on the day immediately before it makes the credit decision and does not obtain any results at a later time Never report more than five AUSs If more than five AUSs were used, choose five AUSs to report

39 Applicant Information: Income and Ratios Gross annual income relied on in processing application or relied on in making credit decision Rule clarifies determining gross annual income relied on when credit decision is not made Ratio of the applicant's or borrower's total monthly DTI ratio relied on in making credit decision NEW! CLTV ratio relied on in making credit decision NEW! Note: The CLTV is the combined value of all property securing the loan; not just the real estate.

40 Applicant Information: Action Taken and Reasons for Denial

41 Applicant Information: Action Taken and Action Taken Date Loan originated Loan closing or account opening Later date of: Initial funds disbursement; Date institution acquired loan from party that initially received application; OR Date loan converts to permanent financing if constructionpermanent Application approved but not accepted Any reasonable date, such as: Approval date, Deadline for accepting offer, or Date file was closed Application denied Date application is denied or Date notice sent to applicant Application withdrawn by applicant Date express withdrawal was received or Date shown on notification form (if written withdrawal) File closed for incompleteness (Preapproval request closed for incompleteness not HMDA reportable) Date file was closed or Date notice sent to applicant

42 Applicant Information: Action Taken and Action Taken Date Purchased loan Date of purchase Preapproval request denied Date preapproval request was denied or Date notice sent to applicant Preapproval request approved but not accepted Any reasonable date, such as: Approval date, Deadline for accepting offer, or Date file was closed Must report origination as occurring in year in which origination goes to closing or account is opened

43 Applicant Information: Demographic Information Hold that thought

44 Property Information

45 Property Information: Address and Value Street, city, state and zip code for property used as collateral NEW! State, county, and census tract only if property is located in MSA or MD in which institution has home or branch office or if required to report data on small business, small farm, and community development lending under CRA May report "Not Applicable" for both location data elements if information is not known at the time final action is taken (ex. new construction with no address at loan closing) Value of property securing loan NEW! If obtaining multiple values, report value relied on in making credit decision (Note: this includes the value of all property securing the loan, not just the real estate) Report "Not Applicable" if: File was closed for incompleteness Application was withdrawn before a credit decision was made, even if property value had been obtained Credit decision is made without relying on the property value

46 Property Information: Lien Status Report lien status on property securing the loan or property to which loan or application relates Purchased loans Lien status determined by reference to best information readily available to the institution at the time of purchase Applications and originations Lien status determined by reference to best information readily available at the time final action is taken, such as: Information obtained from a title search The applicant s statement on the application form The applicant s credit report

47 Property Information: Occupancy Type If buying or building new dwelling that will become principal residence within year (or upon completion of construction), the new dwelling is considered the principal residence Purchased loans: May report occupancy type as principal residence unless loan documents or application indicate property not occupied as principal residence Second residence if is or will be occupied by applicant or borrower for only portion of the year and is not applicant s or borrower s principal residence, such as a vacation home Investment property if applicant or borrower does not occupy property at all. For example, if a person purchases property, does not occupy the property, and receives income by renting the property, the property is investment property

48 Property Information: Total Units NEW! Report number of individual dwelling units related to property securing loan Application: report the number of individual dwelling units related to property proposed to secure loan Application or loan secured by a manufactured home community: include total number of manufactured home sites that secure loan and available for occupancy, regardless of whether sites are occupied or have manufactured homes attached For loan secured by single manufactured home that is or will be located in manufactured home community, report one individual unit For a loan secured by condominium or cooperative complex, report total number of individual dwelling units securing loan or proposed to secure loan in the case of an application May include recreational vehicle pads, manager apartments, rental apartments, site-built homes, or other rentable space that are ancillary to operation of secured property if such units are considered in underwriting guidelines or investor guidelines, or if number of such units are tracked for internal purposes May rely on the best information readily available at time action is taken, such as: Information provided by applicant that is reasonably believed Information contained in property valuation or inspection Information obtained from public records

49 Property Information: Multifamily Affordable Units NEW! If property securing loan or proposed to secure application includes multifamily dwelling, provide number of individual dwelling units that are income-restricted pursuant to Federal, State, or local affordable housing programs Affordable housing income-restricted units Individual dwelling units that have restrictions based on occupants income level pursuant to restrictive covenants encumbering the property. Covenants may be evidenced by use agreement, regulatory agreement, land use restrictions, or a similar agreement. Rent control or rent stabilization laws, the acceptance of Housing Choice Vouchers, and other similar forms of portable housing assistance that are tied to occupant and not individual dwelling unit are not affordable housing income-restricted dwelling units for purposes of reporting May rely on the best information readily available to it at time final action is taken, such as: Information provided by applicant that is reasonably believed Information contained in property valuation or inspection Information obtained from public records

50 Property Information: Construction Method NEW! Site built Includes modular homes and factory built homes that do not meet the definition of manufacture home (HUD certificate) Also includes multi-family dwellings, unless the multi-family dwelling is a manufactured home community Manufactured home If manufactured home community, report construction method as manufactured home Must have the HUD certification label Prior to 6/15/1976- not a dwelling (not reportable)

51 Property Information: Manufactured Home (Secured Property Type) NEW! Manufactured home and land Manufactured home and not land Not applicable Not required to report this attribute if the construction method is Site built or if you are reporting a Manufactured home community that is a multi-family dwelling

52 Property Information: Manufactured Home (Land Property Interest) NEW! Report information about applicant s or borrower s property interest in land on which manufactured home is or would have been located Direct ownership: Applicant or borrower has more than a possessory real property ownership interest in land, such as fee simple ownership Indirect ownership Applicant or borrower is or will be member of resident-owned community structured as housing cooperative in which occupants own entity that holds the land underlying the manufactured home community. Applicant or borrower may still have lease and pay rent for the lot on which his or her manufactured home is or will be located, but property interest type should be reported as indirect ownership if applicant is or will be a member of cooperative that owns the manufactured home community s underlying land Paid leasehold Applicant resides or will reside in resident-owned community structured as a housing cooperative in which occupants own an entity that holds the land underlying the manufactured home community. Applicant or borrower may still have a lease and pay rent for the lot on which his or her manufactured home is or will be located, but property interest type should be reported as paid leasehold if applicant is not or will not be a member of cooperative that owns the manufactured home community s underlying land For example, borrower locates manufactured home on lot on which he or she does not have an ownership interest; has a written lease for the lot; and lease specifies rent payments Unpaid leasehold Borrower locates manufactured home on land owned by family member, does not have written lease, and does not have an agreement regarding rent payments Report N/A if 1) is not a manufactured home or 2) if manufactured home community that is a multi-family dwelling.

53 Loan Information

54 Loan Information: Loan Amount and Loan Type Loan Amount Closed-end loan, other than purchased loan, an assumption, or a reverse mortgage: Report amount to be repaid as disclosed on legal obligation Purchased closed-end loan or assumption of closed-end loan: Report unpaid principal balance at time of purchase or assumption Open-end line of credit, other than a reverse mortgage open-end line of credit: Report the amount of credit available to the borrower under terms of plan For reverse mortgage: Report the initial principal limit, as determined pursuant to Section 255 of the National Housing Act and implementing regulations and Mortgagee Letters issued by HUD Report as a whole number; no truncating (ex. if the loan amount is $110,500, enter or Loan Type Whether the loan is or application was for: Conventional, Insured by FHA, Guaranteed by VA, or Guaranteed by the RHS or the FSA Whether or not loan is reverse mortgage NEW! Whether or not loan is open-end line of credit NEW! Whether or not loan is business or commercial purpose NEW! May rely on Regulation Z 12 CFR for guidance

55 Loan Information: Loan Purpose Loan Purpose Home purchase Construction-permanent Assumptions Refinancing Home Improvement No more unsecured loans Cash Out Refinancing NEW! Refinancing classified as a cash out refinancing Other NEW!

56 Loan Information: Loan Purpose CFPB HMDA Small Entity Guide Section 5.7

57 Loan Information: General Terms and Interest Rate NEW! Report the term of the loan as the scheduled number of months after which the legal obligation will mature or terminate or would have matured or terminated If the loan includes a schedule with repayment periods other than months, report the loan term in months using an equivalent number of whole months without regard for any remainder For fully amortizing loans, enter the term of the loan in months, ending with the final payment due date. Loans that do not fully amortize during the maturity term, such as loans with a balloon payment, are reported using the maturity term rather than the amortization term For a purchased loan, report the number of months after which the legal obligation matures as measured from the loan s origination For an open-end line of credit with a definite term, report the number of months from account opening until the account termination date, including both the draw and repayment period (if any) For a loan or application that does not have a definite term, such as a reverse mortgage, report "Not Applicable"

58 Loan Information: General Terms and Interest Rate NEW! Interest Rate May use a decimal separator Report the interest rate applicable to a loan or to an application that is approved but not accepted Report the introductory rate period as the number of months from loan closing or account opening until the first date the interest rate may change For an application, report the number of months from loan closing or account opening until the first date the interest rate could have changed under the proposed terms There is no requirement to report introductory interest rate periods based on preferred rates unless the terms of the legal obligation provide for an expiration date for the preferred rate Preferred rates include loan terms that provide that the initial underlying rate is fixed but that it may increase or decrease upon the occurrence of some future event, such as: An employee leaving the employ of the institution The borrower closing an existing deposit account with the institution The borrower revoking an election to make automated payments Report the term of any prepayment penalty period in months

59 Loan Information: Special Loan Product Features NEW! Balloon Payment: One that is more than two times amount of regular periodic payment Interest Only payments: One or more periodic payments may be applied solely to accrued interest and not to loan principal Negative Amortization: Payment of periodic payments that will result in increase in principal balance Must report whether or not loan contains any other contractual terms which would allow for any payments other than fully amortizing payments

60 Loan Information: Costs and Credits

61 Loan Information: Costs and Credits NEW! For loans subject to Regulation Z s Closing Disclosure (CD) requirements: Report total of all itemized origination charges that are designated borrower paid at or before closing as disclosed in Block A of the Closing Costs Details page of the CD If amount changes because revised CD is issued during same reporting period in which loan closing occurred, report revised amount annually and/or quarterly, as may be applicable Report total discount points paid to creditor to reduce interest rate as disclosed on Block A, Line.01 of the Closing Cost Details page of the CD If amount changes because revised CD is provided during same reporting period in which loan closing occurred, report revised amount annually and/or quarterly, as may be applicable Report amount of lender credits disclosed in the second row in Block J on the Closing Cost Details page of the CD If amount changes because revised CD is provided during same reporting period in which loan closing occurred, report revised amount annually and/or quarterly, as may be applicable Report N/A for any fields that are Not Applicable

62 Loan Information: Costs and Credits NEW! If the loan is subject to Reg. Z, ATR, and TRID where a CD is produced, report the amount of total loan costs as disclosed in Block D of the Closing Cost Details page of the Closing Disclosure and report "Not Applicable" for total points and fees If the amount changes because a revised CD is provided during the same reporting period in which the loan closing occurred, report the revised amount annually and/or quarterly, as may be applicable If the loan is subject to Reg. Z and ATR, but a CD is not produced, report total points and fees and report "Not Applicable" for total loan costs If it is determined that the transaction s total points and fees exceeded the applicable limit and the overage is cured during same reporting period in which closing occurred, report revised amount annually and/or quarterly, as may be applicable For example, an institution is required to submit HMDA data quarterly. It closes a loan on January 2, 2020, and cures an overage on January 9, The institution reports the revised amount of total points and fees in both its quarterly LAR submitted for first quarter data by May 30, 2020, and its annual LAR submitted in 2021 for 2020 data If loan is not subject to Regulation Z and there are no costs and/or credits, report "Not Applicable"

63 Loan Information: Rate Spread and HoEPA Report the difference between the loan s annual percentage rate (APR) and a comparable transaction s average prime offer rate (APOR) as of the date the loan s interest rate was set If an application does not result in an originated loan for a reason other than that the application was approved but not accepted by the applicant, report "Not Applicable" If an application (including a preapproval request) was approved but the applicant did not accept, report the difference between the APR of the loan that would have resulted had the applicant accepted it and a comparable transaction s APOR as of the date the interest rate was set Report whether or not a consumer credit transaction subject to Regulation Z and secured by a principal dwelling is a high-cost mortgage For an application or loan that is not subject to HOEPA, report "Not Applicable"

64 Loan Information: Type of Purchaser

65 Loan Information: Type of Purchaser Report type of purchaser if: Loan being reported was both originated and sold within same calendar year Loan being reported was both purchased and sold within same calendar year Private securitizer: entity (other than those listed in 1-4) which is known or reasonably believed to securitize the loan Knowledge or reasonable belief based on: Purchase agreement or other related documents Previous transactions with purchaser Purchaser s role as securitizer (such as investment bank) If, in selling the loan, it is unknown (or reasonably believed) whether purchaser will securitize loan, and it is known that purchaser frequently holds or disposes of loans by means other than securitization, report loan as purchased by one of the other types of purchasers, as appropriate If purchaser meets criteria to be private securitizer and also falls within one of the other reportable categories in 6, 71, 72, 8, or 9, report purchaser is a private securitizer Affiliate institution: company that controls, is controlled by, or is under common control with the institution Mortgage company: non-depository institution that purchases loans secured by dwellings and, typically, originates loans secured by dwellings Other: purchaser that is not any of the options provided. Report purchaser type of Other if purchaser was bank holding company or thrift holding company that is not a private securitizer and is not an affiliate of institution

66 Loan Information: Type of Purchaser If loan was originated or purchased, but was not sold during calendar quarter for which data is being recorded, report "Not Applicable" If the loan is sold in a subsequent quarter of same calendar year, record type of purchaser for quarter in which loan was sold If loan is sold in succeeding year, do not record or report sale

67 Questions?

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