The HMDA filing deadline for the 2018 LAR just passed on March 1, 2019, but mortgage lenders do not have the luxury of taking a break. They should have already begun preparing their 2019 data, which includes the next phase of reporting changes and the enforcement provisions regarding ‘good faith efforts’, which became effective on January 1, 2019. Yet more revisions loom with new quarterly reporting requirements, and institutional and transactional coverage changes for open-end lines of credit, that will become effective on January 1, 2020.
The Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) provides the following exemptions for Small Volume Mortgage Lenders [banks, savings associations, or credit unions], from the new Regulation C expanded HMDA data reporting requirements that became effective on Jan. 1, 2018, unless it meets all of the coverage criteria for depository institutions under the pre-2017 Regulation [not applicable to Non-depository Financial Institutions]:
- For closed-end mortgage reporting, the lender should have originated fewer than 500 of such loans in each of the preceding two calendar years.
- For the years 2018 and 2019, open-end lines of credit are excluded transactions for a financial institution that does not originate at least 500 of them in each of the two preceding calendar years.
- Effective January 1, 2020, open-end lines of credit are excluded transactions for a financial institution that does not originate at least 100 of them in each of the two preceding calendar years
While most LO systems have been updated to add the additional required data points and calculate the new Universal Loan Identifier [ULI], many loan originators are still using outdated data collection procedures. Are you confident that your data is accurate? Has your staff been trained under the new requirements? Have you tested your reporting eligibility?
While a violation of Regulation C exposes lenders to administrative sanctions and civil monetary penalties, the HMDA Rule also provides that inaccuracies or omissions in quarterly reporting are not violations of HMDA or Regulation C if the financial institution makes a good-faith effort to report quarterly data timely, fully, and accurately, and then corrects or completes the data prior to its annual submission. This will remove the luxury of waiting until year-end to scrub your data, while also allowing for data corrections as new information is obtained.
We can assist with assessing your institution’s coverage criteria and helping you to develop and institute best practices to ensure that HMDA data is collected correctly, as loans progress, to avoid errors and a massive effort when the next filing deadline approaches. Don’t wait until 2020 to start preparing! Call Gooi Mortgage, Inc today for your consultation!