In this article, we discuss about HMDA reporting and other latest details of HMDA to assist institutions in their HMDA reporting. It includes a summary of responsibilities and requirements, directions for assembling the necessary tools, and instructions for reporting HMDA data. Let’s touch base HMDA at first.
Home Mortgage Disclosure Act (HMDA)
- The Home Mortgage Disclosure Act (HMDA) is a federal law approved in 1975 that requires mortgage lenders to keep records of key pieces of information regarding their lending practices, which they must submit to regulatory authorities.
- It was implemented by the Federal Reserve through Regulation C.
- In 2011, the rule-writing authority of Regulation C was transferred to the Consumer Financial Protection Bureau (CFPB).
- The goal is to create greater transparency and to protect borrowers in the residential mortgage market.
- HMDA data also allows regulators, public officials and consumer watchdogs to monitor trends in mortgage borrowing and lending for compliance with fair housing and other laws and to direct housing investment and government funding to areas where it is needed.
- HMDA reporting allows regulators to analyse information on mortgage loans and mortgage lending trends in a number of categories, such as the number of pre-approvals made, the number of mortgages granted, loan amounts, and the purposes of individual loans.
How to submit HMDA report?
- The way you submit your HMDA data:
- Filers will submit their HMDA data using a web interface referred to as the HMDA Platform. Information regarding the HMDA Platform can be located at: https://ffiec.cfpb.gov.
- It is recommended that HMDA filers use a modern browser, such as the latest version of Google Chrome™, Mozilla® Firefox®, Internet Explorer® 11, Microsoft Edge™, or other modern browsers.
- The following submission methods will not be permitted:
a. PC Diskette and CD-ROM
b. Submission via Web (from the Data Entry Software (DES))
c. E-mail to HMDASUB@FRB.GOV
d. Paper Submissions
- The process by which you validate the edit report:
- Financial institutions must address all edits prior to submitting their HMDA data. In contrast to the previous process for filing data with the Federal Reserve Board (FRB), all edits must now be addressed prior to filing HMDA data with the Bureau in order to complete the submission process.
- The edit report will be web-based:
a. Edit reports will not be e-mailed to filers in PDF format. Instead, the Bureau edit reports will be viewed and can be downloaded from the HMDA Platform.
b. Responses to the edits will not be faxed or e-mailed to the Bureau. The HMDA Platform will guide filers through the process of addressing edits.
- The agency with which you file resubmissions of your HMDA data:
- A resubmission means that you have already filed your HMDA submission and received a confirmation receipt, but you are submitting again for the same filing year. Beginning with data collected in 2017, filers will resubmit their HMDA data to the Bureau.
- The Officer Certification process:
- As part of the submission process, an authorized representative of your institution with knowledge of the data submitted shall certify to the accuracy and completeness of the data submitted. Filers will not fax or e-mail the signed certification.
- Loan/Application Register format
Beginning with data collected in 2017, your HMDA data loan/application register will be submitted in a pipe (also referred to as vertical bar) delimited text file format. This means that:
- Each data field within each row will be separated with a pipe character, “|”.
- Do not include leading zeros for the purpose of making a data field a specific number of characters.
- The loan/application register will be a text file with a .txt file format extension. 13 Text entries in alphanumeric fields do not need to use all uppercase letters with the exception of:
- “NA” used when the reporting requirement is not applicable;
- Two-letter state codes;
- A capital “E” at the beginning of any “Exempt” response. As with previous submissions:
- The first row of the loan/application register will begin with the number one (1) to indicate that the data fields in row one contain information relating to your institution.
- All subsequent rows of the loan/application register will begin with the number two (2) to indicate that the data fields beginning in row two contain data fields for the loan/application register, with information relating to the reported loan or application.
- Each covered loan or application must appear on its own line in the loan/application register.
- HMDA edits are rules to assist filers in checking the accuracy of HMDA data prior to submission. There are four types of edits:
- Syntactical:
Edits that check whether the loan/application register is in the correct format and whether the data covers the correct filing year. A syntactical edit occurs, for example, if none of the rows in the loan/application register begin with the number two (2) to indicate that the following data fields contain information relating to the reported loan or application. The loan/application register cannot be submitted until the filer corrects all syntactical edit errors and re-uploads the updated loan/application register to the HMDA Platform.
- Validity:
Edits that check whether there are valid values in each data field. A validity edit occurs, for example, if the contact person’s telephone number does not follow the format “999-999-9999.” The loan/application register cannot be submitted until the filer corrects all validity edit errors and re-uploads the updated loan/application register to the HMDA Platform.
- Quality:
Edits that check whether entries in the individual data fields or combinations of data fields conform to expected values. A quality edit occurs, for example, if the reported Tax Identification Number does not match the Tax Identification Number the institution reported on the previous year’s loan/application register. The loan/application register cannot be submitted until the filer either confirms the accuracy of all values flagged by quality edits in the HMDA Platform or corrects the flagged values and re-uploads the updated loan/application register to the HMDA Platform.
- Macro Quality:
Edits that check whether the submitted loan/application register as a whole conforms to expected values. A macro quality edit occurs, for example, if the reported percentage of multifamily loans exceeds 10% of the loan/application register entries. The loan/application register cannot be submitted until the filer either confirms 95 the accuracy of all the values flagged by the macro quality edits in the HMDA Platform or corrects the flagged values and re-uploads the updated loan/application register to the HMDA Platform.
HMDA Help
- Technical questions about reporting HMDA data collected in or after 2017 should be directed to hmdahelp@cfpb.gov.
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Take Five Consulting is a technology company, based in Virginia U.S., that specializes in the Mortgage Banking vertical especially LOS implementation and application development. Take Five Consulting creates and implement mortgage technology and software specifically for Mortgage Industry.
