Loan officers/assistants are responsible for collecting required data for reportable applications and completing a HMDA data entry sheet. Monthly a member of the compliance department reviews all non-originated applications and a loan closing report from our core for HMDA reportable loans. She also looks for reportable loans that the loan personnel may have missed. She then pulls those files, reviews the data sheet (asks for it to be completed if they forgot) and makes sure that all documentation ties back to the file. Once we know the information on the data sheet is correct, and that all data sheets have been obtained, that person inputs the data into the LAR. Quarterly, I review the LAR, spot check a sample of the entries, and look for "inconsistencies" that might be errors (like a income code reported for a business).
We also keep a paper "package" on each loan on the LAR that includes a copy of the data sheet and any document from the file that evidences or backs up that data (rate spread calc or loan memo detailing income relied upon, for example). We also make notes of anything that we had to research or investigate so that if questions come up later, we have it there. We are a small insitution with fewer than 100 entries on the LAR. Our paper package might not be feasible for a larger bank, but we have found it invaluable. Anytime an auditor or examiner questions an entry on the LAR, we are able to quickly produce the package and show them exactly why we entered the data.
In mid January, we begin scrubbing each entry on the LAR. We go through every paper package and compare it back to the LAR.
We have very few errors (sometimes, none!) on our LAR with these procedures, but it may not work for a bank with a larger amount of entries.
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