#2168734 - 03/16/18 07:03 PM
Re: S.2155 - passed Senate with 100 amendments but...
Anonymous
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Anonymous
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Cool. It's still 500, as passed by the Senate. Now to see how mangled the House will make it.
SEC. 104. HOME MORTGAGE DISCLOSURE ACT ADJUSTMENT AND STUDY.
(a) In General.--Section 304 of the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2803) is amended-- (1) by redesignating subsection (i) as paragraph (3) and adjusting the margins accordingly; (2) by inserting before paragraph (3), as so redesignated, the following: ``(i) Exemptions.-- ``(1) Closed-end mortgage loans.--With respect to an insured depository institution or insured credit union, the requirements of paragraphs (5) and (6) of subsection (b) shall not apply with respect to closed-end mortgage loans if the insured depository institution or insured credit union originated fewer than 500 closed-end mortgage loans in each of the 2 preceding calendar years. ``(2) Open-end lines of credit.--With respect to an insured depository institution or insured credit union, the requirements of paragraphs (5) and (6) of subsection (b) shall not apply with respect to open-end lines of credit if the insured depository institution or insured credit union originated fewer than 500 open-end lines of credit in each of the 2 preceding calendar years. ``(3) Required compliance.--Notwithstanding paragraphs (1) and (2), an insured depository institution shall comply with paragraphs (5) and (6) of subsection (b) if the insured depository institution has received a rating of `needs to improve record of meeting community credit needs' during each of its 2 most recent examinations or a rating of `substantial noncompliance in meeting community credit needs' on its most recent examination under section 807(b)(2) of the Community Reinvestment Act of 1977 (12 U.S.C. 2906(b)(2)).''; and (3) by adding at the end the following: ``(o) Definitions.--In this section-- ``(1) the term `insured credit union' has the meaning given the term in section 101 of the Federal Credit Union Act (12 U.S.C. 1752); and ``(2) the term `insured depository institution' has the meaning given the term in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).''. (b) Lookback Study.-- (1) Study.--Not earlier than 2 years after the date of enactment of this Act, the Comptroller General of the United States shall conduct a study to evaluate the impact of the amendments made by subsection (a) on the amount of data available under the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2801 et seq.) at the national and local level. (2) Report.--Not later than 3 years after the date of enactment of this Act, the Comptroller General of the United States shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report that includes the findings and conclusions of the Comptroller General with respect to the study required under paragraph (1). (c) Technical Correction.--Section 304(i)(3) of the Home Mortgage Disclosure Act of 1975, as so redesignated by subsection (a)(1), is amended by striking ``section 303(2)(A)'' and inserting ``section 303(3)(A)''.
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#2179670 - 05/24/18 06:06 PM
Re: S.2155 - passed Senate with 100 amendments but...
RR Joker
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Power Poster
Joined: Sep 2010
Posts: 2,658
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If they dare try to go back to true pre 2018 we are in for a mess. My thoughts exactly.
_________________________
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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#2179704 - 05/24/18 07:46 PM
Re: S.2155 - passed Senate with 100 amendments but...
Anonymous
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Anonymous
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OP here: This is why it won't be difficult. The New CFPB (whatever you call it now), I predict, will say:
1. Use the new 2018 LAR tool
2. But hit delete on all the data that is covered by the exemption that became effective 5/23 or 5/24/18
3. They will tell us there will be no penalties or ECOA violations for over-collecting or over-reporting for any time in 2018. They'll give us time to absorb this new law and make changes in June, July, August, etc. If you file something you could have deleted, they won't penalize you. 2018 is a diagnostic year.
I think you'll be told that you can just delete what extra data you collected in 2018, even retroactive to 1/1/18, even thought the law passed in May. Your 26-column LAR will be filed on a 109-column reporting tool. You can very, very easily wipe out all this data if you move it to excel, delete your data from certain columns, and upload it to CFPB. Easy peesy. A 1-hour fix done in Feb. 2019. Not a problem.
I predict also that they'll release a 26-column tool in either 2018 or 2019, so that you can switch to that soon as you can. And they'll give you as much time as you need, without penalizing you for using the 109-column LAR when you didn't have to.
These changes are very good for banks. This is a major victory for common sense regulation of smaller financial institutions, a very historic day. Let's make sure we don't waste the opportunity to celebrate.
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#2182311 - 06/19/18 04:43 PM
Re: S.2155 - passed Senate with 100 amendments but...
Anonymous
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Anonymous
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OP here: I don't work for a regulator, but for a smallish bank that will benefit tremendously by the rollback of this poorly-thought-out 109-column LAR garbage.
ICBA's summary shows that certain provisions of S. 2155 require rulemaking, while others do not. The HMDA provision does not require rulemaking as is effective immediately.
This is a unique thing during my few (15 or so) years in banking; I can't recall a law that didn't require rulemaking, so, yeah, the industry is confused...what do we do? How do we comply, with no rulemaking? It's crazy. But it's still a joyous occasion.
What I'm hoping to see is an announcement to be made very, very soon (this week would awesome) by CFPB/BCFP or whatever they call it now, telling us it's effective on X date and how to proceed: whether that means a new LAR tool, a homemade excel LAR, emailing an encrypted .dat file like we used to, or whatever - even using the 109-column LAR would work. Bankers just need the BCFP to step forward and tell us, immediately, what we are supposed to be doing.
In my state, every banker I know is still collecting year 2018 demographics and other byzantine/obscure loan details that we already know we will not have to report. We are wasting a ton of time complying with a law that Congress rendered obsolete, effective almost a month ago now.
CFPB are you listening? Help!
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#2182481 - 06/20/18 06:47 PM
Re: S.2155 - passed Senate with 100 amendments but...
Anonymous
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Anonymous
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OP here: I'm really wary of people thinking new HMDA is not a big deal. I suspect you haven't written a LAR in a long time if you think that's the way it is. I don't have any "typical mortgage" files, but we're required to report HMDA data. I don't want any non-bankers out there reading this thread to suffer under the false impression that new 2018 HMDA is merely a matter of gathering data already present in our files. For us, like many other HMDA-reporting banks, it certainly is not so simple.
I work at a bank that does a ton of commercial loans. A typical file will have, for instance:
We often have 2 to 15 properties securing the loan, some of which are AOC with no stated value, and CFPB wants a combined total property value on all of them.
No LTV stated anywhere, yet somehow we approved the loan. We used a "margin" of up to X%. Is that our reportable LTV? Maybe. We also have a lot of construction-related deals where property value and LTV are not in file or even necessarily relevant. They may also have multiple LTVs expressed for different stages of the loan.
We have a scanned image of signed document somewhere that will express the interest rate, loan term, intro rate period, etc. But these aren't just fields in my system, where I can tell the system to generate a LAR that captures those numbers. I have to read that grainy, scanned, signed document, and manually type in the answers to each LAR field.
Balloon payment, yes or no? Well, let me go find another scanned document and read it, and see if the final payment is more than a certain amount over the "regular" payments, using a Reg Z consumer definition for this commercial loan. Then add a yes or no code (1 or 2) corresponding to the deduced answer. There is no "balloon yes" field in my system. This is manual.
I have no idea what the options under Manufactured Home Property Type even mean; ditto for Manufactured Home Land Property Interest. We do some mobile home lending - typically, for an entire mobile home park. None of the options make any sense under our state law.
Total Units, ha ha, that's a good one. 12 properties, some of which have appraisals, most of which have multiple units. Sure, let me just go pull up images - from appraisals and, when those aren't present in the file (perhaps because it was denied?) from Google Maps - and count doorways and extrapolate which doorways look like individual units. Add all that up, and, nice, an hour later, I have data for a single field on the LAR. Then I need to know how many are income-restricted under any local, state, or federal law.
NMLSR - I pull it from a list and add it manually to the LAR. After looking up a specific spot to see who the officer was on that deal. Not a field in our system.
ULI - manual process using CFPB website tool. I then copy and paste this 28- to 38-digit number, which exists solely to satisfy CFPB regs, into our LAR, in lieu of having a LAR field that gives me a straightforward loan number or application number to which I can refer during the 10 to 50 repeat trips to this LAR row I'm going to be making this year.
I manually obtain online, and paste the weird, duplicative geocoding data so that we have a 5 digit "county code" (showing state and county code) and an 11-digit "census tract" consisting of the same 5 digits as the other field, plus the usual 6-digit census tract, with the decimal point manually removed, every time.
I manually convert every single date from 6/20/2018 to CFPB's silly 20180620 format, on several columns for every entry.
When borrowers are natural persons, I manually type the codes for the thirty-six fields corresponding to demographics.
I manually correct every dollar figure so that we have loan amount expressed without commas but with decimals (62000.00 for 62,000.00) but property value has to have the information rounded with no decimals (150000 for 150,000.00) while loan amount has to be expressed to the penny with no rounding, with commas and decimals (1,815,215.94 for 1,815,215.94). If you were intentionally trying to cause LAR errors, you couldn't do much better than making 3 ways to write a dollar figure on one row. That is, unless, you could find over a dozen ways to say "not applicable"...
I constantly refer to a chart to cope with the 13 different ways that HMDA 2018 has for expressing a simple "NA." For instance, if visual observation of the ethnicity of the applicant is not applicable, that's code 3. But if visual observation of the ethnicity of the co-borrower is not applicable because there was no co-borrower, that's code 4. If the borrower's race is not applicable because the borrower is an LLC, that's code 7. But if the co-borrower's race is not applicable because there is no co-borrower, that's code 8. If the borrower did not choose a 2nd race selection, that selection is inapplicable, so express that with a blank field, as opposed to the "NA" you would use to say that income is not applicable. If HOEPA status in not applicable, well, that's code 3. If the credit score of the borrower is for some reason not applicable (it was not used in the credit decision, or the borrower is an entity) then that's code 8888. If the co-borrower's is not applicable because there is no co-borrower, that's 9999. Recently I counted that there are 13 unique ways to express "NA," on the LAR. Absolutely none of these absurd codes are already present in my loan files.
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Reverting to year 2017 standards will mean reporting "Asian" but not "Korean," right? So we are in fact collecting demographics info that we are exempt from reporting, aren't we? And many of these obscure data points have no relevance to me, as a HMDA staffer, other than to satisfy the new 2018 HMDA LAR requirements. So yes, I'm certain that the industry needs immediate relief and an immediate announcement from the CFPB about how to cope with S 2155.
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#2182524 - 06/20/18 10:19 PM
Re: S.2155 - passed Senate with 100 amendments but...
Anonymous
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10K Club
Joined: Jul 2001
Posts: 83,224
Galveston, TX
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"Reverting to year 2017 standards will mean reporting "Asian" but not "Korean," right? So we are in fact collecting demographics info that we are exempt from reporting, aren't we?"
This is not a reversion to the 2017 rules, you would only be exempt from the following, and the new demographics is not one of them:
(5) the number and dollar amount of mortgage loans grouped according to measurements of-
(A) the total points and fees payable at origination in connection with the mortgage as determined by the Bureau, taking into account 15 U.S.C. 1602(aa)(4);
(B) the difference between the annual percentage rate associated with the loan and a benchmark rate or rates for all loans;
(C) the term in months of any prepayment penalty or other fee or charge payable on repayment of some portion of principal or the entire principal in advance of scheduled payments; and
(D) such other information as the Bureau may require; and
(6) the number and dollar amount of mortgage loans and completed applications grouped according to measurements of-
(A) the value of the real property pledged or proposed to be pledged as collateral;
(B) the actual or proposed term in months of any introductory period after which the rate of interest may change;
(C) the presence of contractual terms or proposed contractual terms that would allow the mortgagor or applicant to make payments other than fully amortizing payments during any portion of the loan term;
(D) the actual or proposed term in months of the mortgage loan;
(E) the channel through which application was made, including retail, broker, and other relevant categories;
(F) as the Bureau may determine to be appropriate, a unique identifier that identifies the loan originator as set forth in section 5102 of this title;
(G) as the Bureau may determine to be appropriate, a universal loan identifier;
(H) as the Bureau may determine to be appropriate, the parcel number that corresponds to the real property pledged or proposed to be pledged as collateral;
(I) the credit score of mortgage applicants and mortgagors, in such form as the Bureau may prescribe; and
(J) such other information as the Bureau may require.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2182540 - 06/21/18 12:32 PM
Re: S.2155 - passed Senate with 100 amendments but...
Anonymous
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Anonymous
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I think I am unclear on what S.2155 actually does. Does it:
a) Provide exemption for some (or all?) of the new HMDA items specified by Dodd-Frank? b) Or undo only the discretionary data points invented by CFPB? c) Or both of the above? d) Or create a 3rd list, and exempt only those?
Randy’s response indicates that we would be exempt from numerous items that were specifically spelled out in Dodd-Frank, that is, not the discretionary items dreamed up by CFPB, but rather, items from the actual text of Dodd-Frank, including:
1. Points & Fees 2. Difference between APR and benchmark rate 3. Prepayment penalty 4. Property Value 5. Intro rate period 6. Whether terms include non-amortizing features 7. Term in months 8. Channel 9. NMLS of originator 10. Universal loan ID. 11. Parcel Number 12. Credit Score
My understanding was Dodd-Frank also required reporting of: 13. Applicant Age, and 14. Postal Address,
…but I could be mistaken. Old HMDA was 26 columns of data. With Dodd-Frank changes only (and without any added discretionary items), we’d be looking at some 39 data points, representing, I believe, 44 data columns total (since some items must be reported for each of two applicants), if CFPB had only added the data points specified in Dodd-Frank.
However, CFPB used the phrase “such other information as the Bureau may require†to change the LAR from the 39 to 44 columns it would have been, up to the full 109 columns it is today. Following are the data points that I believe CFPB initially added under its own discretion, and these would be, I thought, also subject to exemption via S. 2155 for smaller institutions:
15. All the new ethnicity, race, and sex choices, as well as whether they were collected visually (reducing GMI back to 6 columns of data per borrower, instead of this year’s 18 columns per borrower) 16. The new choices in Loan Purpose (elimination of having to distinguish between cash out refi vs. refi with no cash out) 17. Construction Method – though this is really just another way of saying property type 18. Change to occupancy type (from “owner occupied as principal residence vs. NOT owner occupied as a principal residence" to the more complex “principal vs. secondary vs. investment†which clouds the question of whether the loan is consumer or commercial when “investment†is chosen) 19. Making county code 5 digits, census tract 11 digits – though this probably won’t change since FFIEC is transitioning this to CFPB - and maybe this is what CFPB is using as "parcel number" because I don't see "parcel number" anywhere in the 2018 LAR filing tool. 20. Credit Scoring Model code & free-form – though I suspect we’ll have to keep this, otherwise the Credit Score is rendered meaningless, isn't it? 21. Mandatory reporting of reasons for denial (this could go back to optional) 22. Total Loan Costs 23. Origination Charges 24. Discount Points 25. Lender Credits 26. Interest Rate 27. Debt-to-Income Ratio 28. Combined Loan to Value 29. Balloon Payment 30. Interest-only payments 31. Manufactured Home Property Type 32. Manufactured Home Land Property Interest 33. Total Units 34. Multifamily Affordable Units 35. Initially Payable to Institution 36. Automated Underwriting results for each borrower (eliminates 12 columns) 37. Reverse Mortgage yes/no 38. Open-end line of credit yes/no 39. Business or commercial purpose
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