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HOME MORTGAGE DISCLOSURE ACT

PRESENTED BY

ANNE LOLLEY and

TOTAL TRAINING SOLUTIONS2

REACHING ANNE

877-778-5192 X4

anne@cox.net

NO MEMORIZING

BACKGROUND AND

APPLICABILITY

BACKGROUND

Home Mortgage Disclosure ActReferred to as HMDAEncourages loans to inner-cityNo lending requirementsCollect & report data

SUPPLEMENTAL INFO

Reg C + Commentary

FFIEC website – www.ffiec.gov

Guide to HMDA Reporting – Getting it Right

FFIEC’s FAQ (page 24)

LAR Codes and Instructions Chart (page 16)

REPORTING INSTITUTIONS

HMDA reporting is required if: Assets over $43 million, and Home/branch office in MSA

Threshold changes annually9

METROPOLITAN STATISTICAL AREAS

www.ffiec.gov/census

Guide to HMDA Reporting

HMDA REQUIREMENTS

Collect monitoring dataCollect more data on worksheetEnter data into LAR quarterlySubmit LAR annuallyMake FFIEC disclosure availableMake modified LAR availablePost notice of availability

HMDA LOANS

APPLICATIONS / ORIGINATIONS / PURCHASES

HOME PURCHASE

HOME IMPROVEMENT

LOANSREFINANCINGS

HMDA LOANS . . .

EXEMPTIONS

HELOCS TEMPORARY LOANS(CONSTRUCTION & BRIDGE)

SECOND, PERMANENT LOAN

IS EXPECTED

TEMPORARY LOANS

HMDA LOANS

HMDA could apply to:Business loansNon-real estate loans

APPLICABILITY

Home-purchase loans

Home-improvement loans

Refinancings16

APPLICABILITY

HOME-PURCHASE LOAN

1. Purchase dwelling

2. Secured by dwelling17

DOES NOTHAVE TO BE

SAME DWELLING

APPLICABILITY

HOME-IMPROVEMENT LOAN #1

1. Improve dwelling

2. Bank classifies as home improvement18

REGARDLESS OF WHETHER LOAN IS

SECURED BY DWELLING

APPLICABILITY

HOME-IMPROVEMENT LOAN #2

1. Improve dwelling

2. Secured by dwelling19

DOES NOTHAVE TO BE

SAME DWELLING

APPLICABILITY

REFINANCING

Old loan secured by dwelling

New loan secured by dwelling

DOES NOTHAVE TO BE

SAME DWELLING

HMDA LOAN TYPES

Business loansNon-real estate loansHome equity lines of creditTemporary loansPurchase-and-rehab loansPreapprovals and qualificationsDual-purpose loansMultiple properties

HMDA LOAN TYPES

BUSINESS-PURPOSE LOANS

Dwelling to resell for profit

Rental property

HMDA LOAN TYPES

NON-REAL ESTATE LOANS

Manufactured homes

HMDA LOAN TYPES

HOME-EQUITY LINES OF CREDIT . . .

Optional reporting

HMDA LOAN TYPES

EXEMPT TEMPORARY LOANS

Construction loansBridge loans

UNDER RESPA . . .ONLY EXEMPT IF

UNDER TWO YEARS

HMDA LOAN TYPES

NOT TEMPORARY LOANS Combined construction/perm loan Perm loan to replace temporary

THESE ARE NOT “TEMPORARY”HMDA APPLIES

HMDA LOAN TYPES

PURCHASE AND REHAB One loan – HMDA applies

Two loans – First/temp loan is exempt

HMDA LOAN TYPES

PREAPPROVAL ONLY REPORTABLE IF INSTITUTION HAS PROGRAMREQUIRINGFULL REVIEW OF CREDITWORTHINESS A WRITTEN COMMITMENT

HMDA LOAN TYPES

PREQUALIFICATIONWHETHER PROSPECTIVE APPLICANT

WOULD LIKELY QUALIFY FOR CREDIT

NOT AN APPLICATION - NOTREPORTABLE

HMDA LOAN TYPES

DUAL-PURPOSE LOANS

LOAN PURPOSE REPORT LOAN AS

PURCHASE + REFINANCING PURCHASE

PURCHASE + HOME IMPROVEMENT PURCHASE

REFINANCING + HOME IMPROVEMENT HOME IMPROVEMENT

HMDA LOAN TYPES

MULTIPLE PROPERTIES

LOAN TYPE REPORT THIS PROPERTY

HOME IMPROVEMENT

PROPERTY BEING IMPROVED

MORE THAN ONE – ANY OR MULTIPLE

HOME PURCHASE

PROPERTY TAKEN AS SECURITY

MORE THAN ONE – PROPERTY BEING PURCHASED

MULTIPLE PURCHASED – ANY OR MULTIPLE

REFINANCING PROPERTY TAKEN AS SECURITY

MORE THAN ONE – ANY OR MULTIPLE

TERMS AND

DEFINITIONS

TERMS & DEFINITIONS

ApplicationDwelling Home improvementHome purchaseHMDA LoansManufactured homesRefinancingsTemporary loans

TERMS & DEFINITIONS

APPLICATION . . .

Oral or written request for loan

TERMS & DEFINITIONS

DWELLING . . .Residential Structure

• Even if not attached to real property• Not limited to 1-to-4 family• Not limited to personal/principal residence

TERMS & DEFINITIONS

“DWELLING” INCLUDES . . .Condo unitManufactured homeVacation homeRental propertyApartment buildingVacant residential structure

EXCLUDES

RECREATIONAL VEHICLES (BOATS AND CAMPERS)

TRANSITORY RESIDENCES (HOTELS/HOSPITALS/DORMATORIES)

TERMS & DEFINITIONS

HOME IMPROVEMENT . . .ImprovingRepairingRehabilitatingRemodeling

All or part of a dwelling38

TERMS & DEFINITIONS

“HOME IMPROVEMENT” includes . . .

Improvements to the real property on which a dwelling is located:

• Swimming pool• Building a garage• Landscaping

TERMS & DEFINITIONS

HOME IMPROVEMENT- Dual-use property

APARTMENTS(DWELLINGS)

BUSINESS

TERMS & DEFINITIONS

HOME IMPROVEMENT- Dual-use property

If proceeds are used primarily to improve the residential portion . . . reportable home improvement loan.

Use any reasonable standard: Percentage of loan proceeds Square footage Income generated

Case-by-case determination41

TERMS & DEFINITIONS

HOME PURCHASE - Dual-use property

If purchased building is primarily residential . . . reportable home-purchase loan.

Use any reasonable standard Square footage Income generated

Case-by-case determination 42

TERMS & DEFINITIONS

HOME PURCHASE - Loan to purchase farm

Loan to purchase farm is exempt• Even if dwelling is located on farm

Exemption limited to purchase• Home improvement loan is reportable• Refinancing is reportable

TERMS & DEFINITIONS

HOME PURCHASE - Two loans

Each loan is separate home-purchase loan

Each loan is subject to HMDA

TERMS & DEFINITIONS

HMDA LOANS – Applications

HMDA covers applications - even if not resulting in a loan

TERMS & DEFINITIONS

MANUFACTURED HOMEFactory-built home ready for occupancy

upon leaving factory

If requires construction at building site, not a “manufactured home.”

TERMS & DEFINITIONS

REFINANCING

Old and new loan both secured by dwelling

Regardless of purpose!

Includes other lender refinancings 47

TERMS & DEFINITIONS

REFINANCING - Temporary loan

When a temporary loan is refinanced with another temporary loan, it remains a temporary loan

Remains exempt from HMDA

TERMS & DEFINITIONS

REFINANCING -Refinancings/renewals

Includes both refinancings and renewals

“Refinancing” does not include: Extensions Deferrals Modifications

CREDIT UNION RESPONSIBILITIES

COLLECT MONITORING DATA

Collect monitoring data Ethnicity Race Sex

Natural persons only (not corporations, partnerships, trusts)

Typical monitoring block on page 1351

ON ALL APPLICATIONS . . .

Ask for data (cannot require)

Inform applicant . . .Federal government requests data to monitor laws prohibiting discrimination 52

IN-PERSON APPLICATIONS . . .

Inform applicant . . .If applicant does not provide data, lender must note the data on the basis of sight or surname

MAIL/PHONE - Data not provided

Data need not be provided

Lender must indicate that application was received by mail or phone

MULTIPLE RACIAL DESIGNATIONS

Lender must offer applicant option of selecting one or more racial designations

INADVERTENT COLLECTION OF DATA

Cross through data

Write “not used for this purpose” across monitoring block

GATHER HMDA DATA

Monitoring dataLoan numberApplication dateLoan typeProperty typePurpose of loanOwner occupancyLoan amountPreapprovalAction taken

Date of action takenProperty locationIncomeReasons for denialRate spreadHOEPA statusWhether loan was sold

GATHER HMDA DATA

Lender/loan processors collect information . . . usually on a worksheet

Deliver worksheet to person who enters the information into the computerized Loan Application Register (LAR)

Our worksheet – page 31

PROPOSED REVISIONS

CFPB has proposed changes - not yet final

Expect to report:• Age of applicant• Points and fees• Debt-to-income ratio• Property value• Loan term• Introductory interest rate• Credit score• Interest rate• Total discount points

Lenders exempt if less than 25 mortgages per year59

REPORT HMDA DATAData is reported on computerized LAR

Enter information by code

Appendix A contains LAR instructions

Appendix B has instructions for monitoring data

See pages 16 – 23 for detailed information from:• Appendix A• Appendix B• Reg C Commentary

LAR TIMING REQUIREMENTS

Enter info into LAR within 30 days after end of calendar quarter in which final action was taken

Electronically submit LAR to regulatory agency by March 1 following the calendar year in which the data was compiled

Retain copy 3 years

REQUIRED DISCLOSURES

1. FFIEC DISCLOSURE STATEMENT

From submitted data Make available 3 business days after receipt

________

In 10 days, make available at branches in other MSAs, or

Post address for written requests (use notice)63

2. MODIFIED LARMake available to the public

Remove:• Application/loan number• Application date• Date action was taken (loan date)

3. NOTICE OF AVAILABILITY

Post notice in: Lobby of home office Each branch located in an MSA

From regulator . . . or make your own

Model wording – page 1565

Total Training SolutionsInfo@ttsTrain.com1‐800‐831‐0678CUWebinars.comttsTrain.com

Anne Lolleyalolley@cox.net1-877-778-5192 ext. 4

2015 Webinars

• January 7 - Opening Business Accounts for Credit Unions

• January 12 - Appraisals and Evaluations - The Federal Guidelines

• February 5 - 10 Lessons Learned When Your Member Dies

• February 10 - Lending Compliance 101

• March 5 - Opening Trust Accounts, Estates and Fiduciary Accounts

• April 8 - Best Ever Compliance Checklist for Consumer Loans

• June 3 - Handling Powers of Attorney

• June 10 - New Share Member Account Interview - CIP, CDD and Legal Issues

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