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The CFPB just released their new 2018 LAR (Loan/Application Register) formatting tool, with updates to their 2018 HMDA data reporting Instructions Guide. These can both be found, along with other HMDA data reporting requirements, on the CFPB HMDA Website.
This new tool should be used for the reporting of the new required HMDA data collected by lenders in 2018 for reporting in 2019.
Although much has been reported recently about potential changes to HMDA, the data to be collected and covered institutions, it seems CFPB keeps rolling along toward compliance with the recently revised/updated HMDA requirements and increased data collection.
Hopefully, lenders are doing the same and not waiting and hoping for changes. Preparation for the required reporting and gathering of the new data elements should be made now. No time like the present. Plus, lenders should be carefully analyzing such information to uncover any potential problems or defects.
The data required to be reported to the CFPB needs to cover all reportable loan transactions and be both complete and accurate in every detail. Inaccurate data is just as bad as missing or incomplete data.
Initially, inaccurate information may result in a request from CFPB for an updated, corrected resubmission. Imagine the additional work!
Further, inaccurate and incomplete information will provide the CFPB with an inaccurate picture of a lender’s performance. This could lead them to perform a deeper dive into the data provided leading to the potential for further investigation, thereby opening the door to fines and penalties.
Both fines and penalties can be avoided by careful collection and analysis, before submission to CFPB. This will save time, money, and the cost of the needed corrections of your HMDA data on an ongoing basis.
Lenders can’t simply rely on a data dump of the required data fields from the LOS. We all know how unreliable LOS data can be. It is prone to human error.
To help ensure data accuracy and integrity lenders need to compare their LOS data to the sources of truth, the loan documentation.
This is the only way a lender can be sure of the accuracy of the information submitted. Anything short of this…is just guesswork. This leaves the possibility of the submission of incomplete and/or inaccurate data. Unfortunately, you won’t find out until it’s too late.
If you don’t have a HMDA solution that validates the information that you are required to submit, you’re taking a huge gamble. This is a bet that you can’t afford to lose.
So why gamble with your future? One way or another, lenders must report required HMDA data. It must be complete and accurate and reported when and how it is required by the CFPB. You may as well get some benefits.
Have the proper technology that collects, validates, and reports what’s required. A rules-based system that automates the process and quickly identifies the areas needing attention or correction. A system that provides you with the substantive data for proper analyzation prior to submission.
Better for you to identify potential problems early for correction, rather than for CFPB to find them and penalize you later.
Such a solution does exist. LoanLogics can help.
