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#2153693 - 11/15/17 05:30 PM
Re: Reporting Visual Observation
chellibird
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Power Poster
Joined: Aug 2006
Posts: 4,266
Chillin an grillin
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Thanks BK, I tried testing on my software but for some reason the validity edits are not updated.
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#2155827 - 12/02/17 10:19 PM
Re: Reporting Visual Observation
chellibird
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Diamond Poster
Joined: Nov 2008
Posts: 1,137
In the mountains
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If we receive an application by mail or it is dropped off and the LO calls the applicant because there are multiple items left blank on the application including the fact that the Demographic Information was not completed, is it ok to read them the disclosure and give them the opportunity to provide their information at that time or to indicate they do not wish to provide the information.
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#2156702 - 12/08/17 09:45 PM
Re: Reporting Visual Observation
Banker K, CRCM
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Platinum Poster
Joined: Aug 2010
Posts: 528
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Regarding the "Collection Method" data field, there was an earlier thread that suggests NA could indeed be used for non-F2F applications. We thought the consensus was that you can't use NA unless its a purchased loan or non-natural person. So confused.... Link to Thread
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#2156740 - 12/11/17 02:33 PM
Re: Reporting Visual Observation
chellibird
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Gold Star
Joined: Jan 2010
Posts: 293
Oklahoma
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Yes see above from 11/15 - you will generate Validity Errors on your LAR if you report "NA" in collection method other than when applicant is an entity. Other thread was last questionned in October and after that I had tested our LAR software. Hard to keep up with the different threads on same topics I would go with this last update if I were you.
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Compliance - A Painful Addiction
All comments are mine & should not be taken as legal advice.
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#2156834 - 12/11/17 08:43 PM
Re: Reporting Visual Observation
chellibird
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Gold Star
Joined: Jan 2010
Posts: 293
Oklahoma
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Since we have implemented the use of the new expanded GMI form, our Secondary Market area has reported that their LOS, Encompass, will not allow them to complete the "collection method" fields when the app is not taken F2F.
I asked them to submit a case to ask them to correct this - has anyone else ran across this issue?
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Compliance - A Painful Addiction
All comments are mine & should not be taken as legal advice.
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#2156836 - 12/11/17 08:56 PM
Re: Reporting Visual Observation
chellibird
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Platinum Poster
Joined: Aug 2010
Posts: 528
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We have also queried Encompass about this issue as well.
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#2156855 - 12/12/17 04:23 AM
Re: Reporting Visual Observation
Banker K, CRCM
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10K Club
Joined: Jul 2003
Posts: 17,410
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Since we have implemented the use of the new expanded GMI form, our Secondary Market area has reported that their LOS, Encompass, will not allow them to complete the "collection method" fields when the app is not taken F2F.
I asked them to submit a case to ask them to correct this - has anyone else ran across this issue? I'm in the camp that doesn't consider this a problem, as I've acknowledged previously in this and other threads on the topic. (David is in the other camp.) I doubt Encompass, which is our LOS too, will consider this a problem. They may give you a work around as they have to us for other items that are different for our particular situation or by our choice.
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#2156873 - 12/12/17 02:06 PM
Re: Reporting Visual Observation
chellibird
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Gold Star
Joined: Jan 2010
Posts: 293
Oklahoma
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@ Truffle Royale I'm not finding your posts about this not being a problem.
We cannot leave the field blank or we get validity errors on our LAR. If Encompass doesn't allow us to check the boxes on non-F2F apps, then those fields will be blank on the LAR for all non-F2F apps and we will generate validity errors that someone will have to manually go in on each loan and complete the boxes then. Sounds like a problem to me!
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Compliance - A Painful Addiction
All comments are mine & should not be taken as legal advice.
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#2156920 - 12/12/17 04:38 PM
Re: Reporting Visual Observation
chellibird
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100 Club
Joined: Sep 2015
Posts: 120
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I was hoping that Encompass was smart enough to still mark the LAR as "not collected on the basis of visual observation..." on these, but that doesn't appear to be the case. I just confirmed the LAR is always blank if marked telephone, internet, or mail.
Another thing to add to my list of open HMDA issues in Encompass I guess. Considering their dominant size, I've been thoroughly unimpressed with their programming for the HMDA updates.
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#2157002 - 12/12/17 07:46 PM
Re: Reporting Visual Observation
chellibird
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Platinum Poster
Joined: Aug 2010
Posts: 528
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In the past, a LAR could not be submitted with Validity edits - Quality edits had to be verified and confirmed accurate as reported or corrected before submission would be accepted.
As far as Encompass, yes, leaving those fields blank is not the issue, its when you try to upload to your LAR interface (in our case, Questsoft) that you will get stopped with the Validity edits for leaving those fields blank.
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#2157244 - 12/14/17 03:13 PM
Re: Reporting Visual Observation
chellibird
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Gold Star
Joined: Jan 2010
Posts: 293
Oklahoma
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In the latest FIG for 2018+ on page 90, it states that if there is a validity error that the LAR still cannot be submitted. That is how it is today.
We are still arguing with Encompass to allow us to report "not collected..." when app is not F2F, since leaving blank generates a validity error.
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Compliance - A Painful Addiction
All comments are mine & should not be taken as legal advice.
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#2157264 - 12/14/17 03:45 PM
Re: Reporting Visual Observation
chellibird
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Gold Star
Joined: Jan 2010
Posts: 293
Oklahoma
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That's not one of the 'allowances' the CFPB gives for reporting NA in those fields though. They're not an entity so they can't be "NA".
The issue is the regulation being misleading on saying "if F2F"...per a CALL with CFPB (of course nothing in writing) the only time it's POSSIBLE to be based on visual observation is if the app was F2F...but if not F2F app, then the "yes" wont apply, and they state we can't leave it blank. Therefore the only other option is to report "NOT collected...".
So this is what we are arguing. Would like to see what you find when you do testing, or if anyone else tests this on the CFPB tool.
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Compliance - A Painful Addiction
All comments are mine & should not be taken as legal advice.
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#2157284 - 12/14/17 05:05 PM
Re: Reporting Visual Observation
chellibird
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100 Club
Joined: Sep 2015
Posts: 120
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If that is their stance, then they should at least spit out NA on the LAR if the fields are not going to be available instead of just leaving them blank. Though either is still going to be an issue with submitting.
Also of note is that Encompass does not ask how the application was taken like the references listed on the DI collection form and in the HMDA rule. Their fields actually ask how the demographic information was collected. In the case of a telephone/mail/internet application that doesn't complete the DI, later comes into the office, and we collect it manually, those two things are not the same.
In that situation, would we report No for the collected on visual observation data points because, even though we collected them visually in an in person meeting, it was not actually an in person application? That seems to adhere to the language of the reg, but it seems backwards.
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#2157298 - 12/14/17 05:49 PM
Re: Reporting Visual Observation
chellibird
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100 Club
Joined: Sep 2015
Posts: 120
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I think that stance is a little risky, but I completely agree with all of your logic Truffle! All of the different definitions of application, application process, etc. cause more compliance headaches than almost anything else, especially when they do not agree with each other. Maybe one day they will unify the regs and give us one solid definition to rely on. I expect this to happen shortly after scientists figure out how to unify the theory of general relativity and quantum mechanics
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#2157304 - 12/14/17 05:57 PM
Re: Reporting Visual Observation
chellibird
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10K Club
Joined: Jul 2003
Posts: 17,410
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Ah but logic and government is as big an oxymoron as jumbo shrimp, isn't it. Definitely agree with the government being more like an octopus than a unified entity, cgorham. Not only does one tentacle not know what another is doing, a few of them are he// bent on choaking the life out of compliance bankers! fwiw, I have tied the TRID 6 to my Reg C/HMDA GMI/DI cutoff and it works for us both internally and through various exams.
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#2157333 - 12/14/17 07:54 PM
Re: Reporting Visual Observation
chellibird
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10K Club
Joined: Nov 2000
Posts: 18,765
Central City, NE
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Truffle: Let me clarify "my stance" on this. You said: [/i]My HMDA view has always been that you complete the application once. It isn't an ongoing process. [/i] I agree. I'm not trying to say you are completing the application.
Appendix B to §1003 #12 states: "If the meeting occurs after the application process is complete, for example, at closing or account opening, you are not required to obtain the applicant’s ethnicity, race, and sex." It's interesting you even used the words "ongoing process" in your last reponse.
That's exactly what I called the CFPB about - a scenario in which the application is complete (per Reg B), but I see the applicant when they drop off their verifications. The CFPB representative said they were not tying the word "application process" to Reg B's definition of "completed application".
As I posted earlier: "While the definition of "application process" is not defined, I would suggest you interpret it as "anytime before closing". If you go with that interpretation, you can't go wrong or have to defend your position with an examiner that has a different understanding." All I'm saying is you don't have to do this, but you may have an examiner argue that you should have collected since you saw them prior to closing. Then you'll have to argue when your application process (not completed application) is complete. It's a conservative approach - I admit. It's a fool proof approach, however.
I've never agreed with collecting at closing.
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#2157357 - 12/14/17 09:36 PM
Re: Reporting Visual Observation
chellibird
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100 Club
Joined: Sep 2015
Posts: 120
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My personal stance is in between. In my opinion, the "application process" lasts through credit approval. At that point, you have either approved the credit or denied it. If you are issuing a commitment letter saying it is approved at that point, then I don't see how they are still in the application process. Not saying that logic will hold up with an examiner, but if it is in our policy and we are consistent (which they really won't have a way of knowing) then I think it would be pretty unreasonable for them to have an issue with it.
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#2157392 - 12/15/17 01:29 PM
Re: Reporting Visual Observation
David Dickinson
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Power Poster
Joined: Sep 2010
Posts: 2,670
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"While the definition of "application process" is not defined, I would suggest you interpret it as "anytime before closing". If you go with that interpretation, you can't go wrong or have to defend your position with an examiner that has a different understanding." All I'm saying is you don't have to do this, but you may have an examiner argue that you should have collected since you saw them prior to closing. Then you'll have to argue when your application process (not completed application) is complete. It's a conservative approach - I admit. It's a fool proof approach, however. To me, this is the key. Why fight a battle with an examiner when the conservative approach seals up all of the loose ends? Plus, it makes training your staff easy: Collect it any time you see them before closing. Sure, there are logistics involved in collecting the info (such as if you immediately scan the application and had previously checked not provided due to application received by mail), but I just can't see how an examiner can criticize this based on the commentary of "application process." Are other stances/camps acceptable? Probably, due to the lack of clarity in the commentary - but the conservative and "fool proof" way takes away any room for examiner criticism.
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Adam Witmer, CRCM All statements are my opinion, not those of my employer, and should not be taken as legal advice. www.compliancecohort.com
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