Are Home Improvement Loans Hmda Reportable – Thus, under the final rule, the disclosure of HMDA data is shifted entirely to the agencies; financial institutions will no longer be required to provide their HMDA data directly to the public, but 30 Proposed § (b)(2). 31 Proposed § (c) FR 51731, , (August 29, 2014). 20 only a notice advising members of the public seeking their data from where it can be obtained online. Consumers will now go to the FFIEC website to get information about the LAR credit unions.
Definition of Financial Institution (January 1, 2017) Additional changes to Financial Institution and requirement to report new data fields (January 1, 2018) Changes to the HMDA rules: Types of financial institutions that are subject to the regulation; Types of transactions that are subject to the rule; The data that financial institutions must collect, record and report; and The process for reporting and disclosing HMDA data. There are additional effective dates – for example from 1 January 2019 – changes to compliance provisions and amendments to reporting provisions take effect. On January 1, 2020 the effective date for quarterly reporting – for large reporters takes effect.
Are Home Improvement Loans Hmda Reportable
4 CFPB – HMDA Effective January 1, 2017 to determine HMDA reporting for 2017. The CFPB added an additional prong to the definition of “financial institution.” “Financial institution” means: The credit union, on the previous December 31, had assets over $44 million for reporting data from 2016 (adjusted annually), had a home or branch office in a metropolitan statistical area (MSA), originated at least. one home purchase loan (excluding temporary refinancing such as a construction loan) or refinancing of a home purchase loan, secured by a first lien on a one-to-four-family dwelling; The credit union is federally insured or regulated; AND In each of the two preceding years, at least 25 home purchase loans were originated, including refinances of home purchase loans that are not otherwise excluded (1003.4(d)).
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5 CFPB – HMDA Effective January 1, 2018 to determine HMDA reporting for 2018. “Financial Institution” means: The credit union, on the previous December 31, had assets above the threshold established and published annually, had a home or branch office. in a metropolitan statistical area (MSA), originated at least one home purchase loan (excluding temporary refinancing such as a construction loan) or refinancing of a home purchase loan, secured by a first lien on a one-to-four family dwelling in the previous calendar year; The credit union is federally insured or regulated; AND In each of the two preceding years, originated at least 25 closed-end mortgage loans that are not otherwise excluded (1003.3(c)) OR originated at least 100 open-ended lines of credit (secured by a lien on a residence) that are not otherwise excluded ((c)) . HMDA Institutional Coverage Charts Exemptions (examples): Closed End Mortgage Loan or Open End Line of Credit that a Financial Institution originates or purchases in a fiduciary capacity, Closed End Mortgage Loan or Open End Line of Credit secured. by lien on unimproved land. The 2015 HMDA Rule also lists Closed End Mortgage Loans and Open Lines of Credit secured only by vacant or unimproved land as Excluded Transactions. However, a loan or line of credit secured by a lien on unimproved land is considered to be secured by Housing (and may not be excluded) if the Financial Institution knows, based on information it receives from the applicant or borrower at the. when the Application is received or the credit decision is made, that the proceeds of that loan or credit line will be used within two years after closing or account opening to build a Residence on, or buy a Residence to be placed on, the land. . A Closed Mortgage Loan or Open Line of Credit that is temporary financing. A transaction is excluded as temporary financing if it is designed to be replaced by permanent financing at a later time.
Credit unions will no longer include home improvement loans that are not secured by the home. Credit unions will be required to report HELOCs. The rule has moved to a “housing secured standard” for all loans or lines of credit for personal, family or household purposes. Applies to closed loans and open lines of credit that are secured by housing. Applies to commercial, closed-end loans and open-end lines of credit that are home-secured and are home purchase loans, home improvement loans or refinancing.
In general, the credit union must report information on actions taken on applications for covered loans, originations of covered loans and purchases of covered loans. An application is a verbal or written request for a covered loan that is made according to procedures that the credit union uses for the type of credit requested. Similar to Reg B, but pre-qualification requests are not applications. An application for pre-approval may be handled differently than an application for pre-qualification for certain types of loans. Pre-approval is an application if the application is: For a home purchase loan; Not secured by multi-family housing; Not for an open line of credit or for a reverse mortgage; and Reviewed under a Pre-Approval Program. A Pre-Approval Program for purposes of the HMDA Rule (2015) is a program in which the Financial Institution: 1. Conducts a comprehensive analysis of the applicant’s creditworthiness (including income verification), resources and other matters typically reviewed as part of the normal credit of the Financial Institution. assessment program; and then 2. Issues a written commitment that: (a) is for a Home Purchase Loan; (b) is valid for a specified time and up to a specified amount, and (c) is subject only to specifically permitted conditions. 12 CFR(b)(2). The written commitment issued as part of the Pre-Approval Program may be subject to only the following types of conditions: 1. Conditions that require the identification of suitable property; 2. Conditions that require that no material change occurs regarding the financial condition or creditworthiness of the applicant prior to closing; and 3. Limited conditions that (a) are not related to the financial condition or creditworthiness of the applicant and (b) the Financial Institution ordinarily adheres to a traditional home mortgage application. Examples of conditions commonly attached to a traditional home mortgage application include requiring an acceptable title insurance bond or certificate indicating a clear termite inspection and, if the applicant plans to use the proceeds from the sale of the applicant’s current home to purchase a new home, a settlement statement showing adequate income from the sale of the current home CFR (b) (2); comment 2(b)-3.
There are 48 total data points to collect. In addition to amendments to existing data points, below are the new data points that credit unions must collect: Property address, age, credit score, total loan costs or total points and fees, origination costs, discount points, lender credits, interest rate, down payment. penalty period, DTI ratio, combined LTV ratio, loan term, introductory rate period, non-amortizing features, property value, manufactured home secured property type, manufactured home land ownership interest, total units, multifamily affordable units, application channel, MLO NMLSR identifier, automated underwriting system, reverse mortgage, open line of credit, and business or business purpose.
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Changes made to applications that will require the collection of information about an applicant’s ethnicity, race, and gender. Appendix B provides instructions on how to collect information on ethnicity, race, and gender. Must indicate whether the information is collected based on visual observation or surname or whether the applicant has provided the requested information. The CFPB issued a proposal to amend Regulation B (ECOA) to be consistent with the changes made to HMDA. With a few exceptions, Regulation B §1002.5(b) prohibits a creditor from asking about the race, color, religion, national origin, or sex of an applicant or any other person (protected applicant-characteristic information) in connection with a credit transaction. At any time from January 1, 2017 through December 31, 2017 a credit union may allow applicants to self-identify using disaggregated ethnic and racial categories and will be considered in accordance with Regulation B.
HMDA data must be reported electronically by March 1 following the calendar year for which data is collected. Credit unions will be required to use the new web-based data submission tool for their reporting as of March 1, 2018. Beginning in 2020, high-volume reporters will report data quarterly (60,000 originated covered loans for the previous calendar year). CFPB website – resources for HMDA filers
Lobby notice disclosure language changes. Credit unions will be required to make data (disclosure and/or LAR) available to the public upon request. A written notice is also required that clearly conveys that the credit union’s disclosure statement and LAR can be obtained on the CFPB’s website. Here is the lobby notice. A similar notice should be available to be provided to members upon request – except for the required language to be provided to members. The disclosure statement and Loan application/record (LAR) can be provided on paper or electronically. At its discretion, a Financial Institution may also provide its LAR, as modified by the Bureau, and impose a reasonable fee for any costs incurred to
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