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Flashcards in HMDA Deck (62):
1

This regulation is the only a loan disclosure law.

HMDA

2

What is a home purchase loan as defined by HMDA?

Loans secured by and made for the purpose of purchasing a dwelling (including condos, mobile homes, coops, single & multi-family dwellings)

3

What is a home improvement loan as defined by HMDA?

A loan secured by a lien on a dwelling that is for the purpose, in whole or in part, of repairing, rehabilitating, remodeling or improving a dwelling or the real property on which it is located AND other loans (secured or unsecured) for the purpose of home improvement that are classified by the financial institution as home improvement loans.

4

What is a refinanced loan as defined by HMDA?

Any dwelling-secured loan that replaces and satisfies another dwelling-secured loan. The purpose of the original loan is irrelevant.

5

Must HELOCs be reported for HMDA purposes?

HELOCs may be reported at the institution's option if they are made for the purpose of home purchase or improvement -- but report only the portion of the loan that represents the covered purpose.

6

Must pre-approvals for home purchases be reported for HMDA purposes?

Yes, if the institution issues a written commitment to the applicant, valid for a designated period of time to extend a home purchase loan up to a specified amount.

7

What does the term "dwelling" include under HMDA?

Residential structure, whether or not it is attached to real property. This includes Condos, mobile and manufactured homes, coops, single & multi-family dwellings.

8

Under HMDA, lenders must collect data regarding applications for _______ and _______ of home purchase loans, home improvement loans, and refinancings for each calendar year including those collected by electronic means.

Originations and purchases

9

Applications for preapprovals for home purchase loans that are denied or results in origination ____ be reported.

must

10

HMDA data may be collected on separate registers for different _____ or _____ _____.

branches
loan types

11

HMDA data must be submitted to the supervisory agency in one complete package with an ____ _____ of accuracy.

officer certification

12

T/F: National banks and savings institutions have the option of reporting the reason for denial on the HMDA LAR.

F. They must report this. It's optional for all other financial institutions.

13

Which of the following institutions is NOT subject to the coverage of HMDA?

- Bank A, with assets of $55 million and located in a large urban city, makes home improvement loans and some home purchase loans to existing customers, but no mortgage loans.
- Bank B, with assets of $20 million and located in a rural area, has several branches, also in rural areas, including one that makes home improvement and home purchase loans.
- Mortgage Company C, with assets of $75 million and a home office in a large East Coast city, makes exclusively home purchase loans.

a. All the institutions are subject to HMDA
b. Bank A
c. Bank B
d. Mortgage Company C.

c. Bank B

Banks must have assets of greater than $44 million in the preceding calendar year, have an officer or a branch in a metropolitan area (MA) and make at least one home purchase loan secured by a lien on a dwelling. Mortgage companies must have assets of $10 million or more in the preceding calendar year, have an office in a MA, and have at least 10% of their loan volume in home purchase loans or have originated HMDA-covered loans of at least $25 million. Therefore, Bank B's asset size exempts it from HMDA coverage.

14

Several types of loan-related data appear in the following list. Which type of data is NOT required to be reported under HMDA?

a. Data on multifamily housing
b. Data on unsecured home improvement loans
c. Data on refinancings of home purchase loans
d. Data on loans to purchase residential lots

d. Data on loans to purchase residential lots

Loans on unimproved land are not covered by the regulation. Unsecured home improvement loans may be reported if the institution classifies them as home improvement loans. If they are not classified as home improvement loans, they do not have to be reported.

15

Of the following types of data, which one is NOT required to be reported for each application for an originated loan subject to Regulation C?

a. Purpose of the loan
b. Race, ethnicity, and sex of the applicant
c. Type of action taken and the date
d. The interest rate on the loan

d. The interest rate on the loan

Lenders do not have to report the interest rate on HMDA-reportable loans. The rate spread is required to be reported, but not the interest rate itself.

16

The following statements make assertions about the collection and reporting of data on race, ethnicity, sex and income. Which statement is false?

a. It must be requested on all HMDA-reportable applications received in person from natural persons.
b. It must be requested only for the loans where the application is taken in person.
c. It must be reported unless the loan was purchased
d. It must be requested verbally on telephone applications.

b. It must be requested only for the loans where the application is taken in person.

The info on race, ethnicity, sex and income must be requested on all HMDA-related applications, even those received by telephone, mail or Internet. It does not have to be reported if the borrower fails to supply the information in an application that is not taken in a face-to-face interview. The institution does not have to report this information on purchased loans.

17

First National is subject to HMDA, On which of these loans does First National have to report the interest rate spread on its HMDA LAR?

a. A loan to remodel a 60-unit apartment complex.
b. A loan to renovate a rental property
c. An unsecured loan to purchase an investment property
d. A home improvement loan secured by a principal dwelling

d. A home improvement loan secured by a principal dwelling

The interest rate spread is only reported on loans subject to TILA.

18

By what date must financial institutions submit their loan application registers to their federal supervisory agency?

a. March 31 of the year following the calendar year for which the data were compiled.
b. March 1 of the year following the calendar year for which the data were compiled.
c. February 1 of the year following the calendar year for which the data were compiled.
d. April 1 of the year following the calendar year for which the data were compiled.

b. March 1 of the year following the calendar year for which the data were compiled.

19

First National is subject to HMDA, which of the following loans would First National report on its LAR?

a. A refinancing of the balance of a home purchase loan made 5 years earlier, both loans will be secured by dwellings.
b. A loan made to a couple, secured by their home, to pay for their children's education.
c. A bridge loan made to a newly transferred executive of a local company
d. A loan made to construct a principal dwelling.

a. A refinancing of the balance of a home purchase loan made 5 years earlier, both loans will be secured by dwellings.

Refinancings of home purchase loans when both loans are secured by dwellings are covered by the regulation. New loans made for purposes other than home improvement, home purchase and refinancings are not covered even if they are secured by real estate. Temporary loans, such as bridge loans and construction loans, are not covered.

20

When must a bank provide its mortgage loan disclosure statement?

a. Only when requested by its federal supervisory agency
b. At any time when requested by a member of the public
c. For 30 days following receipt of a request from its supervisory agency
d. On an ongoing basis, by posting it in the lobby of each branch.

b. At any time when requested by a member of the public

The mortgage loan disclosure statement must be made available to the public no later than 3 days after its receipt from the FFIEC, and the statement must be available for 5 years. The bank must post a notice of the public's right to see the statement in the lobby of each office located within a MA.

21

What information must be on the LAR for home loans on property located within the bank's metropolitan area?

a. The county, census tract, and metropolitan area of the property
b. The address, census tract, and metropolitan area of the property
c. The county, address, and FMV of the property
d. The name, address and metropolitan area of the applicant.

a. The county, census tract, and metropolitan area of the property

22

How must most banks submit LAR to their federal supervisory agencies?

a. In machine-readable format
b. On the standard LAR form
c. In 3 copies with the required transmittal
d. In a separate package for each branch loan application

a. In machine-readable format

Banks with more than 25 LAR entries are required to submit electronically. Otherwise, two hard copies must be sent with the transmittal letter.

23

Which of the following is required to be reported on ABC Bank's HMDA LAR?

a. An application from Mr. Welch for a preapproval of a home purchase loan application that is approved by ABC in writing but not accepted by Mr. Welch
b. An application from Ms. Ensley for a preapproval of a temporary construction loan that is denied by ABC
c. An application from Mr. and Mrs. Rawlings for a preapproval of a home purchase loan application that is denied by ABC
d. An application from Ms. Connor for the HELOAN to be used to consolidate credit cards.

c. An application from Mr. and Mrs. Rawlings for a preapproval of a home purchase loan application that is denied by ABC

Applications for preapprovals for home purchase loans must be reported if they are denied or if the loans are granted. Applications for preapprovals that are approved but not accepted are reportable at the institution's option. Applications for nonreportable loans (the interim construction loan in (b) and the HELOAN for a non-HMDA purpose) are never reported.

24

John and Elise Fernandez apply to ABC Bank for a loan to purchase a manufactured home. ABC Bank is a community bank with approximately $100 million in assets and the home would be located outside of the bank's metropolitan area. Mr. and Mrs. Fernandez complete an in-person application for a mobile home that is denied by the bank due to insufficient income. Which piece of information on the Fernandez application is ABC Bank NOT required to report on its HMDA LAR?

a. The ethnicity of the applicants
b. The race of the applicants
c. The purpose of the loan application
d. The metropolitan area where the home will be located.

d. The metropolitan area where the home will be located.

Because ABC does not have an office in the metropolitan area where the property is located, it does not have to report the property information on its LAR. It may do so at its option. All other info is required.

25

Which of the following loans or applications is EXCLUDED from HMDA reporting?

a. Residential loans purchased on the secondary market
b. Loans secured by real estate that are made for purposes other than home purchase, improvement or refinancing
c. Loans on residential property in a flood zone when proof of flood insurance is not provided
d. Applications for refinancing when there is no increase in principal.

b. Loans secured by real estate that are made for purposes other than home purchase, improvement or refinancing.

Only the types of loans mentioned in the "loans covered" and "compilation of loan data" section s are included in the coverage of HMDA - home purchase, home improvement or refinancing. Loans made for other purposes are not reportable.

26

For HMDA purposes, the term "dwelling" does NOT include which of the following?

a. Timeshares
b. Single family dwellings
c. Individual condos
d. Mobile homes not attached to real property

a. Timeshares

27

Of the following, which is the most likely to be a violation of Regulation C?

a. The MSA number, instead of the MSA name, is used for each loan and application
b. The "reasons for denial" column is blank
c. Race, national origin, and gender information are not included for purchase loans
d. The gender of the applicant is designated by the letters M or F

d. The gender of the applicant is designated by the letters M or F

Codes must be used to indicate sex of the applicant - not the letters "M" and "F"

28

An individual borrowed $1000 to remodel her mobile home. She lives in the mobile home that is not anchored to the ground. The loan will be secured by the mobile home, but the borrower does not own the lot on which it is parked. For HMDA purposes, this loan is considered to be which of the following types of loans?

a. Consumer RV
b. Home equity
c. Home improvement
d. Second mortgage

c. Home improvement

29

Under HMDA, what is the threshold for reporting the interest rate spread for first lien mortgage loans?

a. Equal to or greater than 1.5% points
b. Equal to or greater than 5% points
c. Equal to or greater than 7% points and when the loan is subject to HOEPA
d. Less than 8% points but greater than 5% points.

a. Equal to or greater than 1.5% points

30

In a review of a bank's home mortgage loan application register, which of the following must be included?

a. Loans made or purchased in a fiduciary capacity
b. Servicing rights purchased
c. Interim construction loan applications
d. Loans made and sold within the reporting period

d. Loans made and sold within the reporting period

31

Applications for preapprovals that are approved by the institution but not accepted by the applicant ___ be reported.

may

32

A home improvement loan application was taken on December 2, 2015, but final action wasn't taken until January 2, 2016. If the loan is HMDA reportable, will it be on the 2015 LAR?

No, because final action wasn't taken in 2015. It will be reported in 2016.

33

What are examples of type of loan that need to be reported for HMDA?

It is the loan program, such as conventional, FHA, VA, FSA, RHS

34

What are examples of purpose of loan that need to be reported for HMDA?

home purchase, home improvement, refinancing

35

What are examples of property type that need to be reported for HMDA?

1-4 family dwellings, manufactured housing, or multifamily dwellings

36

Except for national banks and savings institutions, which of the following is optional when reporting for HMDA?

a. Owner-occupancy status of the property to which the loan relates
b. Amount of the loan or application
c. Type of action taken and the date
d. Reason for denial

d. Reason for denial.

This is optional, except for national banks and savings institutions

37

If a creditor has an office within that metropolitan area, the lender must report what for HMDA?

The location of the property to which the loan relates by MA, state, county and census tract.

38

For HMDA, banks with assets of more than $___ or more (and bank holding companies with assets of $___ or more on December 31st of the preceding calendar year) must report property location on all applications.

$305 million
$1.221 billion

39

For HMDA, nonbank mortgage lenders with __ or more loans/applications in a metropolitan area (MA) must report property location for such MA, even if no branch office exists within that MA.

5

40

For HMDA, what 4 things must the bank report on the applicant or borrower?

- ethnicity
- race
- sex
- gross annual income relied on in processing the loan application

41

If the bank originates/purchases and sells the loan within the same calendar year, what must the bank report for HMDA?

The type of entity purchasing the loan

42

When must a bank disclose the rate spread for HMDA reporting?

For originated loans subject to TILA if the APR is equal to or greater than the APOR by:
- 1.5% for first liens
- 2.5% for subordinate liens

43

If the application is taken in a face-to-face interview, what must the lender do if the applicant chooses not to provide GMI?

The lender must inform the applicant that s/he must note the data based on visual observation.

44

GMI may, but does not have to, be collected if the loan is purchased by the FI or for applications taken by a bank, savings association or credit union with assets of $__ or less on the preceding December 31.

$44 million

45

GMI information must be requested for what applications?

telephone mail, or internet

46

If GMI was requested, but not provided on a telephone or mail application, what are the lender's responsibilities?

If the applicant does not complete the information, the lender may state that the information was not provided.

47

If the loan was denied, is the reason for denial required to be reported for HMDA?

OCC & FDIC require the report reasons for denial if FIs are governed by those agencies.

48

What types of financing is excluded from HMDA reporting?

- Loans originated or purchased by the institution in a fiduciary capacity
- Loans on unimproved real estate
- Temporary financing (bridge loans or interim construction loans)
- Purchase of an interest in a pool of loans
- Purchase solely of servicing rights
- Loans acquired as a part of a M&A, or as a part of the acquisition of all of the assets and liabilities of a branch office.

49

For HMDA reporting, how quickly must data be updated after final action occurred?

Within 30 calendar days of the end of each calendar quarter.

50

What must the bank do if an inaccurate error was identified on the HMDA LAR to avoid a violation?

It must be found to be unintentional and the Bank must prove reasonable procedures are used throughout the year to ensure the accuracy of the compilations and reporting to their federal agency.

51

When must the HMDA loan data be sent to the regulatory agency that governs the financial institution?

March 1 of the year following the calendar year for which the loan data is compiled.

52

When must the bank make its mortgage loan disclosure statement available at its home office for inspection by the public?

Within 3 business days after it receives it from the FFIEC.

53

What are the requirements for banks making its mortgage loan disclosure statement available in branch offices?

It must be available within 10 business days after it receives it from the FFIEC in at least one branch office in each MA it has branch offices OR post the address in the lobby for requesting the statement in each branch office.

54

If a bank receives written request, how quickly must the bank mail or deliver a copy of the HMDA mortgage loan disclosure statement?

Within 15 calendar days

55

T/F: The disclosure statements available in the branch offices need only contain the loan information from the metropolitan area where that branch is located.

True

56

If an institution receives a request on or before March 1, when must the institution make their modified LAR available to the public?

By March 31

57

What does the modified LAR include?

Everything but the identification number, date the application was received and the date the action was taken.

58

If an institution receives a request after March 1, when must the institution make their modified LAR available to the public?

Within 30 days

59

How long must HMDA disclosure statements be retained?

5 years from the time they are received from the FFIEC.

60

How long must HMDA LARs and modified LARs be retained?

3 years

61

Are temporary loans HDMA reportable?

No, if the terms 1-2 years, then they are excluded from reporting.

62

Under HMDA, what is the broker rule?

The party who makes the final credit decision is responsible for reporting the loan on the HMDA LAR.