Question & Answer

Question: How will the examiners check the accuracy of my HMDA LAR?

Answer: They will check your HMDA LAR by comparing the entries with the matching loan files. They will request a sample of files, both approved and denied, from the LAR list. They then go through the file and identify the information that should be entered on the LAR. Each discrepancy is noted and becomes a violation.

To improve your rating, you should follow the same procedure - before the LAR data is submitted to FFIEC. If you find a low error rate, your LAR may be ok. But if you find an error rate that is above 5%, you should have the LAR cleaned up before you send it in.

Copyright © 1998 Compliance Action. Originally appeared in Compliance Action, Vol. 3, No. 13 & 14, 10/98