0
0
Revisions to the Revised HMDA Rules
With mortgage lenders just getting over the challenges created from the QM/ATR rules and TRID, they’re now faced with a new hill to climb; HMDA.
CFPB just released a new proposal as Technical Corrections and Clarifying Amendments to HMDA. These are intended to update and clarify the new HMDA final rule it issued in October of 2015. Those rules are due to take effect for loan information gathering and reporting effective January 2018.
As usual, with any rule changes, there is confusion and uncertainty. So, CFPB released a new proposal aimed at clarifying what it is required under the original updated final rule. Confused? You’re not alone.
The new proposal is intended to clarify some definitions and delineates what needs to be reported, and by what institutions, under certain circumstances. This is important as a lender is not required to report all data for all loans.
For example, the new proposal clarifies that transition rules would allow a lender to report the loan purpose and loan originator identifier as ‘not applicable’ for loans purchased that were originated before certain regulatory requirements took effect.
The proposal would also clarify that NY CEMA loans are included for reporting purposes while expanding the definition of multifamily residential structures and clarifying when data needs to be reported for loans made on such dwellings. It also clarifies what is considered as ‘temporary financing’ and need not be reported.
The proposal includes technical corrections to the amended rules, with updates and modifications to the related commentary, to clarify the meaning and intent of certain requirements.
For the most part, the proposed changes cover technical info and they do not reduce nor change the amount of new data that needs to be reported by a lender on covered transactions, as required by the October final rule.
One more thing – CFPB developed an online geocoding tool for a lender’s use in identifying and reporting the required census tract information. Nice touch, but maybe a little late.
If a lender uses this tool they will not be held accountable for any errors reported, as long as the data entered to obtain the information is accurate. It would be nice if lenders can integrate this tool into their HMDA systems.
Good to see that the CFPB is listening to the industry and working to help. I suggest you take a few minutes to review the proposal and provide any comments/suggestions you deem appropriate.
Times running out! In case you care (and you should), there’s only about 38 weeks before HMDA.
