HMDA auditor has never asked about our purchaser codes before. He's seen these same codes every year for 7 years. This year, he says they are all wrong. We're using "HMDA: Getting it Right." For years we've used code 7 to mean "mortgage company" but what it says actually is "life insurance company, credit union, mortgage bank, or finance company." So now he's saying all those are wrong. He's probably right.

The problem is that the purchasers have weird, unclear names and if you call them, the person answering the phone has zero clue what kind of entity they work for. That person may be selling mortgages to consumers, or doing something wholly unrelated to why you are calling, and the likelihood of his being able to correctly identify (or being interested in trying to identify) whether he works for a mortgage bank (code 7) or mortgage company (code 9) is very low. He may have no idea what kind of entity or corp. structure was created to do the purchasing/investing of the loans other lenders make. No one anywhere seems to know. Their websites certainly don't provide a clear description of what type of entity they are.

Solution desired: Can you reply with your list of purchasers (at least a few examples) and what purchaser code you use, and why you chose that code?

I think we're setting ourselves up for bad data by using self-interpretative reading like "The prom. note is stamped with Trustmark Bank, so I know that's a bank because it says 'bank' right there, so that's code 6." The issue is that maybe your stamp says "bank" but in reality that bank has a subsidiary or entity created for this purchasing purpose, and you're really selling to a finance company of theirs (code 7) or their mortgage company (code 9). Your stamp is a little off, a little wrong, so your purchaser codes are all wrong too. Ours, for example:

Caliber Home Loans Inc. is coded 7. I have no idea why. It should probably be a 9.
PennyMac is coded a 7. Apparently that's a mortgage company (?) per Google, so auditor says 9.
Franklin American Mortgage Company is coded a 7. Should be a 9.
Trustmark Bank is a 6. But 6 is only for Commercial Bank, Savings Bank, or Savings Association. Really we use 6 because somebody told me internally that Trustmark is a 6. That's not good enough anymore.

OP Here: Also...
ServiSolutions...an entity of Alabama Home Corp or something similar - we code a 9.
Alabama Home Corp - also a 9.
Both based on the internal shrug, and saying it doesn't seem to fit 0 to 8.

HMDA's GIR options are:
Code 0—Loan was not originated or was not sold in calendar year covered by register
Code 1—Fannie Mae
Code 2—Ginnie Mae
Code 3—Freddie Mac
Code 4—Farmer Mac
Code 5—Private securitization
Code 6—Commercial bank, savings bank, or savings association
Code 7—Life insurance company, credit union, mortgage bank, or finance company
Code 8—Affiliate institution
Code 9—Other type of purchaser

OP here: To illustrate the futility of just asking a company what they are, or which category they best fit: I previously worked at a company that had multiple units/departments/divisions/whatever. Depending on which 800 number you called, if you asked us, “What kind of company is this? What kind of company do you work for?” we would have said one of the following:

We’re a health insurance company
We’re customer service for your city or county benefit plan
We’re a reinsurer
We’re a health and wellness solutions company
We're salespeople offering life insurance
We're attorneys in the litigation unit
We’re a medical care advocate service
We’re a third-party administrator for…(one or more the above)

Not a one of us would have had a clue as to what the corporate structure/organization was of the overall company. It was too nebulous for that kind of simple, two-word answer. Aren't all companies like that nowadays anyway?

You and your auditor need to take a step back here and breathe. A mortgage bank and a mortgage company are the same thing, at least it has been for years under the HMDA GIR FAQs, and I imagine should be going forward.

Your auditor needs to Google less, and spend more time reading the actual rules, commentary and FAQs. I'd be taking this one up the chain if I were you as I wonder what else he has told you incorrect.

There at one time was a tool in one of the agency websites that would tell you the correct purchaser code upon an entry search. I believe the poster Truffle Royale may have that link if I recall. Maybe she might pipe in or you can message her.

Here's a thread that has both the NIC link and a discussion in it. fwiw, since this thread started eight years ago, every examiner through here has used the NIC site to verify the purchaser codes we use. I verify my investors annually to make sure they haven't changed through merger or acquisitions.

Those are outdated codes. The "old" 7 was split into 71 and 72 for 2018 HMDA.

0. Not applicable
1. Fannie Mae
2. Ginnie Mae
3. Freddie Mac
4. Farmer Mac
5. Private securitizer
6. Commercial bank, savings bank,
or savings association
71. Credit union, mortgage company,
or finance company
72. Life insurance company
8. Affiliate institution
9. Other type of purchaser

Original OP here: True - those are the codes for 2018. When I posted the question on Jan. 11, I was scrubbing 2017.