HMDA Reg C

Question 1

Which financial institutions are required to report for HMDA?

Answer 1

-on the preceding December 31, had assets in excess of the asset threshold established annually by the CFPB
-on the preceding December 31, had a home or branch office in an MSA
-in the preceding calendar year, originated at least one home purchase loan or refinancing of a home purchase loan secured by a first lien on a one to four unit dwelling
-meets one or more of the following
—-institution is federally insured or regulated
—-any loan was insured,guaranteed or supplemented by a federal agency or was intended for sale to Freddie Mac or Fannie Mae
-meets at least one of the following
—-in each of 2 preceding calendar years originated at least 25% closed end mortgage loans that are not excluded
—-in each of 2 preceding calendar years originated at least 500 open end lines of credit that are not excluded

Question 2

What is the purpose of HMDA?

Answer 2

• to help determine whether financial institutions are serving the housing needs of their communities
• to assist public officials in distributing public sector investment so as to attract private investment to areas where it it needed
• to assist in identifying possible discriminatory lending patterns and enforcing anti discrimination statues

Question 3

What are covered loans?

Answer 3

Loans for which financial institution receives applications, originates or purchases that are secured by a dwelling.

Question 4

True or False

Financial institutions must address all edits prior to submitting their HMDA data collected.

Answer 4

True

Question 5

True or False

An authorized representative of the institution with knowledge of the data submitted shall certify to the accuracy and completeness of the data submitted.

Answer 5

True

Question 6

True or False

A for profit mortgage lending institution has to meet same requirements as banks/credit unions in order to be required to submit for HMDA

Answer 6

False

Only need to have a home or branch office in a MSA and
In each of the preceding calendar years either originate at least 25 closed end mortgage loans or originate at least 500 open end lines of credit

Question 7

What are 3 characteristics of open end lines of credit?

Answer 7

• repeated transactions
• finance charge on outstanding balances
• line will replenish itself (revolves, ex:credit limits)

Question 8

What is definition of dwelling per HMDA?

Answer 8

It means a residential structure, whether or not attached to real property. The term includes but is not limited to a detached home, an individual condominium or cooperative unit, a manufactured home or other factory built home or a multi family residential structure or community.

Question 9

What are the dwelling exclusions?

Answer 9

Recreational vehicles including boats, campers, travel trailers and park model recreational vehicles are NOT considered dwellings regardless of whether they are used as residences.

Houseboats, floating homes, and mobile homes constructed before June 15, 1976 are excluded.

Excluded are transitory residences such as hotels, hospitals, college dormitories and recreational vehicle parks and structures originally designed as dwellings but used exclusively for commercial purposes.

Question 10

True or False

Mixed use properties are always exempt from HMDA reporting.

Answer 10

False

A property used for both residential and commercial purposes such as a building containing apartment units and retail space is a dwelling if the property’s primary use is residential.

Question 11

How can an institution determine the primary use of a mixed use property?

Answer 11

An institution may use any reasonable standard to determine the primary use of the property such as by square footage or by the income generated. An institution may select the standard to apply on a case by case basis.

Question 12

What is the definition of a home improvement loan?

Answer 12

A home improvement loan means a closed end mortgage loan or an open end line of credit that is for the purpose in whole or part of repairing, rehabilitating, remodeling, or improving a dwelling or the real property on which the dwelling is located.

Question 13

What is the definition of home purchase loan?

Answer 13

Home purchase loan means a closed end mortgage loan or an open end line of credit that is for the purpose in whole or on part of purchasing a dwelling.

Question 14

What is the definition of refinancing?

Answer 14

Refinancing means a closed end mortgage loan or an open end line of credit in which a new dwelling secured debt obligation satisfies and replaces an existing dwelling secured debt obligation by the same borrower.

Question 15

True or False

Modifications are HMDA reportable.

Answer 15

False

Question 16

How should an institution report a multipurpose loan?

Answer 16

If loan is for multiple purposes and even the smallest amount is for a purchase, it should be reported as a home purchase.

Question 17

How should an institution report the following?

Home purchase loan AND a home improvement loan, a refinancing, or a cash out refinancing

Answer 17

A home purchase loan

Question 18

How should an institution report the following?

Home improvement loan AND a refinancing or cash out refinancing but not a home purchase loan

Answer 18

A refinancing or a cash out refinancing as appropriate

Question 19

How should an institution report the following?

A refinancing or cash out refinancing as well as for another purpose (educational expenses) but not a home purchase loan

Answer 19

A refinancing or a cash out refinancing as appropriate

Question 20

How should an institution report the following?

A home improvement loan as well as for another purpose but not a home purchase loan a refinancing or cash out refinancing

Answer 20

As a home improvement loan

Question 21

What are some excluded transactions?

Answer 21

Closed end mortgage or open end line of credits that:

• are originated or purchased by a financial institution acting in a fiduciary (trust) capacity
• is secured by unimproved land
• are for temporary financing
• purchased as part of a merger or acquisition or as part of the acquisition of all of the assets and liabilities of a branch office
• are for purchase of partial interest (participation loans)
• are primarily for agricultural purposes or business/commercial

Question 22

True or False

Small volume originators (less than 500 closed end mortgages/500 open end lines of credit for each of the two preceding years) are ALWAYS exempt from collecting and reporting under HMDA

Answer 22

False

Banks that have received a “needs to improve” CRA rating during each of the last two exams or a “ substantial non compliance” rating at the most recent exam must still collect and report the additional HMDA disclosures.