Discount Points, Lender Credits, and Interest Rate New HMDA Regs
For the new HMDA regulation, a financial institution will now have to report more information in regards to the terms of the loan. This includes such information as the total discount points, lender credits and the interest rate.
The total discount points that are paid to the creditor to reduce the interest rate can be found on page 2 of the Closing Disclosure on Line A.01. If there were no discount points paid, then this data point should be left blank. The other data point that can be found on the Closing Disclosure is the total of lender credits which is on page 2 Line J. Like with the discount points, if there were no lender credits, this data point should be left blank. If a revised Closing Disclosure was issued, then the revised amounts should be reported on the HMDA LAR.
Both of these data points are to be reported as “not applicable” in the same circumstances. The first is if the application did not end in origination. The second circumstance is if the loan or application is not subject to Regulation Z. The last instance is if it is a purchased loan with an application that was received prior to the effective date of Regulation Z.
Another item that must be reported as part of your HMDA data is the interest rate. This data point must be reported for loans that originated and for those that are approved but not accepted. For applications that were denied, withdrawn or closed for incompleteness, this data point should be reported as being “not applicable”.
For more information on HMDA regulations, 2018 data point changes or our HMDA compliance services, please call Rhonda Wannemuehler or Betsy Reynolds at 855-734-7655.
Origination Charges Just One New HMDA Reporting Requirement.
The new HMDA regulation that will take effect in 2018 will require a financial institution to report a myriad of new information. One of these new data points is the total origination charges that are considered borrower paid either at or before closing. This information can be found on page 2 of the Closing Disclosure in Line A. In the case where a corrected Closing Disclosure was delivered and the total charges that are borrower paid have changed, then the corrected amount should be reported on the HMDA LAR.
This is a relatively straight forward addition to the HMDA LAR and there are a few circumstances where this data point will be reported as being “not applicable”. This will occur if the application did not result in origination or if the transaction itself is not subject to Regulation Z. Another reason that this would be “not applicable” is if it is a purchased loan with an application that was received prior to the effective date of Regulation Z.
For more information on HMDA regulations, 2018 data point changes or our HMDA compliance services, please call Rhonda Wannemuehler or Betsy Reynolds at 855-734-7655.
Mortgage Loan Originator NMLS Identifier
Starting in 2018, an institution will report the NMLS ID for the mortgage loan originator. This is a unique number that is assigned to a loan originator through the National Mortgage Licensing System & Registry. The loan officer does not necessarily have to have one in order to provide loan originating services. If they are not required to have a NMLS ID number and they have not obtained one, then this data point should be reported as being “not applicable”.
There are some instances where the loan officer has obtained a NMLS ID but can originate a loan without one as it is not required by the state. The NMLS ID number should be reported on the HMDA LAR regardless of this, unless the transaction falls into one of two categories. First, if it is a purchased loan that is subject to 12 CFR 1026.36(g) (consumer credit transaction secured by a dwelling) and was originated prior to January 10, 2014. The other is if it is a purchased loan not subject to 12 CFR 1026.36(g) and it was originated prior to January 1, 2018. In these instances, this data point should be reported as being “not applicable”.
There are times when there is more than one loan officer associated with that particular transaction. If this occurs, the financial institution should report the NMLS ID of the loan officer who had the primary responsibility for the transaction as of the date of action taken.
For more information on HMDA regulations, 2018 data point changes or our HMDA compliance services, please call Rhonda Wannemuehler or Betsy Reynolds at 855-734-7655.
Application Channel and New HMDA Data
There are two questions for this data point that must be reported as part of the new HMDA data. First, you must report whether the applicant submitted the application directly to your financial institution. For HMDA purposes, an application is treated as being submitted directly to your financial institution if the applicant was directed to a third-party agent who performed origination activities on behalf of the financial institution. However, this would not be the case if the third-party agent assisted the applicant with their application for a loan with another institution. If the applicant completed an application with a broker or correspondent who then sent the application to your financial institution for approval, then this would not be reported as being submitted directly to your financial institution.
The other data point that must be reported is whether the obligation that arises from the application is or would have been initially payable to your financial institution. For applications that are withdrawn, denied, or closed for incompleteness, this particular data point should be reported as “not applicable” if at the time action was taken, the financial institution had not determined whether the loan would be initially payable to this institution.
The one major exception is when you are reporting on a purchased loan. In this instance, both of these data points should be reported as being “not applicable”.
For more information on HMDA regulations, 2018 data point changes or our HMDA compliance services, please call Rhonda Wannemuehler or Betsy Reynolds at 855-734-7655.