How hard and fast are examiners going to consider the fact we reported pricing information on the HMDA-LAR for a loan whose primary purpose is to purchase non-owner occupied investment property - making it technically not subject to Reg. Z? Does our LAR reporting for pricing need to reflect how the loan was disclosed (consumer or business)? The loan is secured by the borrower's primary residence, the loan was treated as consumer purpose, received all the pertinent consumer disclosures, incuding right to rescind.

I don't want to be dinged in a HMDA exam because Reg. Z "deems" credit extended to acquire, improve, or maintain rental property that is not owner-occupied to be business purpose (and therefore not subject to Reg.Z?)?

It used to be safe to error on the side of caution, giving consumer disclosures, but we didn't have the HMDA pricing to consider. It's customary for our mortgage department to treat these a consumer deals when secured by a primary residence. I am really scratching my head on this one...

Giving the Reg Z disclosures when not necessary will have no bearing on your HMDA audits.

Because we have not been through an exam yet based on the new HMDA reporting requirements I am uncertain how they would look at a rate spread being reported when it was not necessary. I guess technically it would be a reporting error.

From page A-9 of the GIR:

b. If the loan is not subject to Regulation Z, or is a home improvement loan that is not dwelling-secured, or is a loan that you purchased, enter “NA.”

I suppose a home purchase loan reported with a occupancy code of 2 could result in a validity edit if pricing is reported. I'll add this to my list of questions for the examiners at the next exam. I am sure this won't be the only thing to come up before it's over and done with this year. Thanks for your input!

We have the same issue Popeye. The majority of our HMDA-reportable loans are for purchases of rentals. Our platform system which generates the LAR doesn't know that it isn't subject to Reg Z so we have to go in and change them to NA, but it is easy to glance over.

Interesting. I'd rather not add this one to the list of things I manually look the LAR over for, there are plenty other bloopers to keep busy with.

I wonder, has anyone checked this out with their agency?