I have the OCC currently reviewing HMDA in my bank. They are commenting that we don't have how we obtained the GMI in each file. If all the GMI is correct, do we have to document how we obtained it (observation, asking the customer, etc.)?

We require our loan officers to mark how the application was received on the 1003 just below the GMI section. If the loan officer made a visual observation they note that and initial it.

If you are not documenting how the information was obtained how do you document the loan officer is just not marking what they want. And if it's marked I do not wish to furnish this information but the information is completed how do you know if the applicant or loan officer completed the information? If you don't have how the information was documented then how can you contend it's accurate?

I agree with Dan totally. If the file does not indicate the circumstances, how does anyone know if it was obtained appropriately (visual observation in a face to face interview after customer indicated do not wish to proceed, etc.)?

I just went through this with a bank; there was much contradiction in the documentation.

For loans that don't use a 1003, we have a separate sheet that documents GMI and how it was obtained.

^^^ We do the same thing.

I find problems with how 1003s and separate forms are completed. Training is key, and follow up.

I think the bigger problem with not noting how an application is taken lies with the borrower not being allowed to answer the questions.
I've spoken with way too many LOs that say 'oh, I know them' or 'they're a neighbor so I just filled it in for them'.

The Reg wants to know if the borrower wants to supply the info in full or in part. To that end, unless the borrower is sitting in front of the LO at the time of application, we train them to leave the info blank. If the borrower is there, the LO MUST ask them if they wish to furnish, not just plow through the choices for them.