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Have you ever felt like you need an academy to understand the requirements of the Home Mortgage Disclosure Act? Some sort of HMDA University?
Well, you are not alone.
Having reviewed thousands of HMDA files and conducted many seminars and training sessions on HMDA, I finally came to the belief that HMDA has a three year learning curve. Basically, my observation was that it took at least three years of doing HMDA for someone to fully grasp it and essentially graduate from the academy, so to speak.
But that was before 2018 which brought major changes to HMDA.
You see, the challenge with understanding HMDA is two-fold. First, the rules are extremely complex. Tedious, in fact. To fully understand them, you must know the regulation, the commentary, the CFPB implementation guide, and the preamble to the rule. But not just one preamble, the preamble to the 2014 HMDA proposal, the 2015 HMDA final rule, and the 2017 HMDA amendment final rule. And so on...
Secondly, HMDA rules just don't address every scenario or situation you might encounter. In fact, there really isn't a good text book available to help you on your HMDA journey and good HMDA instructors are few and far between.
No wonder you might feel like you need some sort of HMDA degree to graduate your confidence.
I totally get it.
For this reason, I have chosen to make HMDA one of the regular topics I discuss here at Compliance Cohort. It is my goal to break down HMDA into bite sized pieces so that you can study HMDA at your own pace, when it works best for you.
This site is not technically some sort of HMDA university or an academy of sorts, but I think that you will find many great (free) resources on this site to help you learn and master HMDA. In time, it is my goal for you to feel empowered enough to have an imaginary HMDA degree that has graduated your confidence to a whole new level.
Welcome to the Compliance Cohort, and best of luck on conquering HMDA.
The following articles are just a few of my recent resources on HMDA:
On April 5, 2024, the CFPB issued a report finding that more borrowers paid “discount points” upfront as overall interest rates rose. According to the CFPB, the percentage of homebuyers paying discount points roughly doubled from 2021 to 2023.
On December 18, 2023, the CFPB adjusted the HMDA exemption threshold from $54 million to $56 million. The adjustment is based on the 4.1 percent increase in the average of the CPI-W for the 12-month period ending in November 2023 (up from 4.7 in 2021 and 8.6 in 2022). Therefore, banks, savings associations, and credit unions with assets of $56 million or less as of Dec. 31, 2023, are exempt from collecting data in 2024.
On November 28, 2023, the CFPB ordered Bank of America to pay a $12 million penalty for submitting false mortgage lending information to the federal government under a long-standing federal law. The CFPB found that hundreds of Bank of America loan officers failed to ask applicants certain demographic questions that are required under federal law, and then falsely reported that the applicants had declined to answer.
On October 10, 2023, the CFPB filed a lawsuit in federal court, alleging that Freedom Mortgage Corporation submitted legally-required mortgage loan data that was riddled with errors, violating both the Home Mortgage Disclosure Act (HMDA) and a 2019 consent order. It can be recalled that in August 2023 the CFPB fined Freedom $1.75 million for paying illegal kickbacks for mortgage loan referrals.
On September 27, 2023, the CFPB released its annual report on residential mortgage lending activity and trends. The report provides an overview of residential mortgage lending in 2022 based on the data collected under the Home Mortgage Disclosure Act (HMDA).
On September 7, 2023, the CFPB released the HMDA Filing Instructions Guide (FIG) for data collected in 2024. As this guide is updated on an annual basis for the new year, there appears to be minimal changes in the newest version of the Guide.
On June 29, 2022, the FFIEC announced the availability of data on 2022 mortgage lending transactions reported under the Home Mortgage Disclosure Act (HMDA) by 4,460 U.S. financial institutions. Covered institutions include banks, savings associations, credit unions, and mortgage companies.
On April 13, 2023, the OCC announced that the Federal Financial Institutions Examination Council (FFIEC) had issued the 2023 edition of A Guide to HMDA Reporting: Getting It Right! for Home Mortgage Disclosure Act (HMDA)-related data collected in 2023 and reported in 2024. This longstanding compliance resource has regularly been used by financial institutions as a “go-to” HMDA resource as it can help financial institutions better understand HMDA requirements, including the data collection and reporting provisions.
On March 20, 2023, the CFPB announced that the HMDA Modified Loan Application Register (LAR) data for 2022 are now available on the FFIEC’s HMDA Platform for approximately 4,394 HMDA filers. The published data contain loan-level information filed by financial institutions and modified to protect consumer privacy.
On March 15, 2023, the CFPB published the 2023 HMDA Institutional Coverage Chart and 2023 HMDA Transactional Coverage Chart. The updated charts are effective January 1, 2023. The updated coverage charts reflect the reduced 25 closed-end loans in each of the previous two calendar years threshold for reporting closed-end applications and loans.
On February 9, 2023, the CFPB the CFPB issued Version 1 of the 2023 Reportable HMDA Data: A Regulatory and Reporting Overview Reference Chart. The 38-page chart is intended to be used as a reference tool for data points required to be collected, recorded, and reported under Regulation C.
On February 3, 2023, the FDIC issued a Financial Institution Letter to inform supervised institutions of recent changes regarding the Home Mortgage Disclosure Act (HMDA) reporting threshold for closed-end mortgage loans and the FDIC’s supervisory approach for enforcing related requirements. According to the FDIC, it does not intend to initiate enforcement actions or cite HMDA violations for certain failures to report closed-end mortgage data collected in the last three years.
On February 2, 2023, the NCUA issued a letter addressed to federally insured credit unions regarding the change to HMDA’s closed-end loan reporting threshold. According to the NCUA, the agency recognizes that credit unions affected by this change may need time to implement or adjust policies, procedures, systems, and operations to achieve compliance with these reporting requirements. Thus, the NCUA intends to take a flexible supervisory and enforcement approach similar to the approach being taken by the CFPB.
On February 1, 2023, the OCC issued a bulletin to inform banks and OCC examining personnel that the loan origination threshold for reporting Home Mortgage Disclosure Act (HMDA) data on closed-end mortgage loans has changed. This is after a court decision was issued that the threshold for reporting is now 25 closed-end mortgage loans originated in each of the two preceding calendar years.
On January 31, 2023, the Federal Reserve Board issued a letter to institutions supervised by the Federal Reserve regarding the changes to home mortgage disclosure act (HMDA) loan volume reporting threshold for closed-end mortgage loans. The letter addresses the impact on financial institutions supervised by the Federal Reserve of recent changes as a result of litigation related to the HMDA reporting threshold for closed-end mortgage loans.
On December 27, 2022, the CFPB adjusted the HMDA exemption threshold from $50 million to $54 million. The adjustment is based on the 8.6percent increase in the average of the CPI-W for the 12-month period ending in November 2022 (up from 1.3 in 2020 and 4.7 in 2021). Therefore, banks, savings associations, and credit unions with assets of $54 million or less as of Dec. 31, 2022, are exempt from collecting data in 2023.
On December 9, 2022, the CFPB issued a technical amendment that formally updates the Code of Federal Regulations to reflect the closed-end mortgage loan reporting threshold of 25 mortgage loans in each of the two preceding calendar years. This change comes after the CFPB announced through a blog post that the HMDA loan volume threshold for reporting data on closed-end mortgage loans has now decreased from 100 to 25 loans in each of the two preceding calendar years in accordance with a September 2022 court decision.
Over two months after the United States District Court for the District of Columbia issued an order vacating the 2020 Home Mortgage Disclosure Act (HMDA) Final Rule, the CFPB has finally broken their silence. On December 6, 2022, the CFPB announced through a blog post that the HMDA loan volume threshold for reporting data on closed-end mortgage loans has now decreased to 25 loans in each of the two preceding calendar years. Read more for a background on this change and how it might apply to you…
In this Compliance Clip (video), Adam discusses how the regulators are analyzing HMDA data for fair lending and explains why financial institutions should be analyzing their own data as well - even if they aren’t a HMDA reporter. This is a topic that was covered in our upcoming Fair Lending Hot Topics program.
On June 16, 2022, the FFIEC announced the availability of data on 2021 mortgage lending transactions reported under the Home Mortgage Disclosure Act (HMDA) by 4,338 U.S. financial institutions. Covered institutions include banks, savings associations, credit unions, and mortgage companies.
On June 13, 2022, the CFPB published the Beginner’s Guide to Accessing and Using Home Mortgage Disclosure Act Data. The guide will serve as a resource to support a range of stakeholders in accessing and using HMDA data, the largest source of publicly available data on mortgage lending in the United States.
In this Compliance Clip, Adam answers a question which had been a topic of debate before the CFPB finally issued a guidance, that is whether to list code 2 or code 3 on the HMDA LAR for when information about determinants are not available. And if you don’t know what is a determinant, watch this video to find out. A transcript of this video is now available.
On 3/29/2022, the FDIC announced that the Federal Financial Institutions Examination Council (FFIEC) had issued the 2022 edition of A Guide to HMDA Reporting: Getting It Right! for Home Mortgage Disclosure Act (HMDA)-related data collected in 2022 and reported in 2023. This longstanding compliance resource has regularly been used by financial institutions as a “go-to” HMDA resource as it can help financial institutions better understand HMDA requirements, including the data collection and reporting provisions.
In this Compliance Clip, Adam answers a HMDA question on whether income and property value should be included in the HMDA LAR when they are not the deciding factor, but are used in determining a credit decision. In other words, when income and property value were factors in the credit decision, but they're just a partial factor, should they be reported?
In this Compliance Clip (video), Adam answers a question that he recently received about reporting a temporary construction loan that has been modified on the HMDA LAR. Specifically, the initial loan was temporary financing and was designed to be replaced by a permanent loan, but was not sold on the Secondary Market as intended. Watch as Adam tries to simplify a somewhat confusing topic. A transcript of this video is now available.
On 1/27/22, the CFPB issued Version 1 of the 2022 Reportable HMDA Data: A Regulatory and Reporting Overview Reference Chart. The 38-page chart is intended to be used as a reference tool for data points required to be collected, recorded, and reported under Regulation C.
On December 23, 2021, the CFPB adjusted the HMDA exemption threshold from $48 million to $50 million. The adjustment is based on the 4.7 percent increase in the average of the CPI-W for the 12-month period ending in November 2021 (up from 1.6 in 2019 and 1.3 in 2020). Therefore, banks, savings associations, and credit unions with assets of $50 million or less as of Dec. 31, 2021, are exempt from collecting data in 2022.
On 12/17/21, the OCC issued the revised interagency Home Mortgage Disclosure Act (HMDA) examination procedures for determining compliance with HMDA and its implementing regulations. The interagency procedures update the April 19, 2019, FFIEC interagency examination procedures for the Home Mortgage Disclosure Act.
The CFPB announced that the publication of Average Prime Offer Rates (APOR) for the week of November 15, 2021 was delayed. This information was listed at the bottom of the page containing the CFPB’s rate spread calculator. As the CFPB states that these data are now available on the Bureau’s Rate Spread Calculator above, financial institution will want to ensure they are using the accurate data for the week of 1/15/21.
On 11/16/21, the Consumer Financial Protection Bureau (CFPB) issued a Request for Information (RFI) to seek input on rules implementing the Home Mortgage Disclosure Act (HMDA). The CFPB plans to review recent changes to the rule and evaluate their effectiveness.
