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#2199297 - 11/28/18 08:26 PM HMDA CLTV, FHA loans and Q617
Everest Offline
Gold Star
Joined: Jan 2012
Posts: 282
I think this has been thrown a bit already. But I am wondering what everyone is reporting for their CLTV on FHA loans.
For approval/credit decision purposes we calculate the CLTV off the base loan amount and property value.
For HMDA reporting, we report the total loan amount as base loan amount plus upfront MIP. This is the loan amount that is being used in our HMDA software to test for the CLTV and it gives us the Q617 error.

I tried researching this a bit and while the reg and CFPB guides say:
(24) Except for purchased covered loans, the ratio of the total amount of debt secured by the property to the value of the property relied on in making the credit decision.

I took this to mean we could document that the Quality error was fine as it was the CLTV used in the credit decision.

However, I did find some information from QuestSoft that stated otherwise:
The Q617 edit has been generating a lot questions as there is still quite a bit of industry confusion surrounding the logic behind it. Most frequently it is seen in FHA loans. Based on feedback from the CFPB and various LOS partners, here is what we know:
•FHA standards are established for qualification purposes – CLTV is calculated using the “base loan amount” for LTV/CLTV limits.
•HMDA requires the CLTV to be calculated using the “total amount securing the debt”.
•The Q617 Quality Edit is intended to identify a potential error. If the error is systemic in nature, the reporting entity must make the appropriate correction prior to submission.
•If your LOS allows you to establish business rules for populating specific data fields on your HMDA screens, we encourage you to consider creating such rules to manage CLTV.

I don't use QuestSoft but we used to....and I take that to mean that the CLTV should be recalculated prior to submission.

Can anyone tell me what they are reporting for the CLTV?

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#2199707 - 12/03/18 10:31 PM Re: HMDA CLTV, FHA loans and Q617 Everest
Antilles Offline
100 Club
Joined: Jan 2007
Posts: 216
Southern US
I have the same question. We utilize QuestSoft. I am having a hard time justifying changing the CLTV to eliminate the quality edit when that amount does not total from what is documented in the file as the CLTV that was used to make the credit decision.
"Success is going from failure to failure without a loss of enthusiasm." - Sir Winston Churchill

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#2201166 - 12/19/18 08:41 PM Re: HMDA CLTV, FHA loans and Q617 Everest
MyKidsMom Offline
Platinum Poster
Joined: May 2004
Posts: 636
Working on the same issue. I'm thinking that FHA guidelines use a 95% LTV that is calculated on the base loan amount, then that is what we should report as the LTV even though the loan amount/property value will give the q error. Anyone????

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#2202512 - 01/09/19 10:13 PM Re: HMDA CLTV, FHA loans and Q617 Everest
Cbigun Offline
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Joined: May 2016
Posts: 158
Is there a list of validity errors and their definitions somewhere?

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#2202545 - 01/10/19 02:28 PM Re: HMDA CLTV, FHA loans and Q617 Cbigun
#12 Offline
Diamond Poster
Joined: Jun 2005
Posts: 1,338
They are listed in the Filing Instruction Guide (FIG).

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#2202552 - 01/10/19 02:57 PM Re: HMDA CLTV, FHA loans and Q617 Everest
Cbigun Offline
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Joined: May 2016
Posts: 158
Thank you. I knew I had seen them somewhere, but couldn't put my hands on it.

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#2220363 - 08/23/19 10:24 PM Re: HMDA CLTV, FHA loans and Q617 Everest
RegComply Offline
New Poster
Joined: Jan 2012
Posts: 19
Has this issue been resolved? Are you using the base loan amount that is on the transmittal summary or the total debt securing the loan/property value relied on in the credit decision?

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#2222336 - 09/25/19 07:49 PM Re: HMDA CLTV, FHA loans and Q617 Everest
Inherent_Risk Offline
Gold Star
Joined: Jan 2017
Posts: 373
The edit in question now only triggers on conventional loans. (Loan type 1)

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