This is a new scenario for us. We are offering a loan product through our bank where we are the 'middle man'. We will be sending the applications to a Mortgage Insurance company to be underwritten. The loan will close in our name, but the Mortgage Company that originated the product will be purchasing them from us. Since we are not making the actual underwriting decision on the loan, will we report these to HMDA?

The financial institution making the credit decision reports the loan. If you search the GIR for makes the credit decision it gives some good examples.

At a prior bank, we had a similar set up. Even though we used the investor’s guidelines, we made the decision, we booked the loan and then sold it. We were required to report.

At a second bank, the bank acted as a broker. If the application met with the buyer’s guidelines, we passed the application to the buyer and we were done. But if it didn’t, we denied it, sent the notice and reported it on our LAR. It wasn’t a big volume because 90% of the applications were pre-qualification requests.

Swiggles makes a great point. You could absolutely have some applications where the investor reports and some where you report. As Dan said, you need to know who did the underwriting as that entity is responsible for reporting.

Two things to keep in mind if you are just getting started with an investor. First, if you are using an investor's software to do the underwriting (like DU, AUS, ect), but never send the file to the investor before closing, you have done the underwriting (even through you did it on the investor's terms). If you send the file to them for the final decision, then you won't report - but if you don't send it, you will report it.

Secondly, keep in mind that investor relationships may change over time. For example, I was once at a client where each file was sent to the investor for the final decision (meaning the bank did not report the origination). During one of my reviews I was double checking the fact that all loan files were still shipped to the investor for the final decision. The Compliance Officer had confirmed this with me (as this was previously the case), but I happened to talk to the mortgage manager who said that the investor had changed their relationship 6 months prior and was now allowing the bank to close the loans without sending the file to the investor, as long as it passed their underwriting system standards (which the mortgage manager had incorrectly assumed was still the investor's underwriting). My point is that sometimes relationships with investors change, so be sure to make sure you know which files are underwritten by whom.

Let me throw one more thing our for consideration for anyone using mortgage insurance underwriters. If you're hiring the mortgage insurance company to underwrite the loans for you, you are considered to be the one making the underwriting decision and have to report the loans. We keep a contract with mortgage insurance companies to have them underwrite files for us if we get swamped. According to our examiner, that makes them our employee and we still have to report. At the very least, call the mortgage insurance company and ask them if they report for HMDA. If not, which I suspect will be the case, then you have to.

Why would a mortgage insurance company be a lender and reporting HMDA? I don't quite follow? They are not purchasing the loans are they?? They are just working on a contract basis for the lender.