We have a new error coming up on our LOS. And while I know you can't answer how an individual software operates, maybe you can point me to the place to find an answer to the posted error. On this particular loan, our rate spread is 2.53% (using the APOR table for adjustable rate loans) for the specific date of this loan. We are getting an error back that shows that the "lien status =1 (1st lien); therefore rate spread must >=3% and <= 99.99% or 0". So??? When & where do I find info that reflects a rate spread must be >=3%. Is this a change with the new HMDA rules that I missed entirely? Or, has that been a thing & I have just not had it come up??

Is this a software generated error or a validity error you are getting when running your batch edit for submission? If it's a software error you will have to go to its documentation or call their servicing area. If it's a validity error give us the error number and maybe we can help.

This link gives you the validity and quality edit references.

https://www.ffiec.gov/hmda/pdf/edit2013.pdf

Do you by any chance have it marked as a HOEPA loan when it shouldn't be.

No, it is a software error. My issue is that when I call the LOS provider, they tell me that it is part of the new HMDA that a rate spread must >= 3% and <= to 99.99% for all 1st lien loans. I didn't see that in any of my info, so just trying to clarify if that is correct and where do I find that info.

My off the top of my head recollection of new HMDA is that ANY spread, even below 1.5, would be reported....so their explanation doesn't make sense (if my memory is correct).

That is my complete recollection. So I don't think they have this right in their database. I'm going to require proof of this from them before I just accept it as the rule.