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#2253323 - 05/01/21 03:05 PM Loan Prospector Decision
Just a girl Offline
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Joined: May 2018
Posts: 11
When reporting the AUS decision do we report the results for purchase eligibility or risk class or both? Purchase eligibility result is eligible and risk class result is accept. We have been using the risk class result but I am now wondering if we should report both results? I cannot see where the regulation really addresses this.

(35)(i) Except for purchased covered loans, the name of the automated underwriting system used by the financial institution to evaluate the application and the result generated by that automated underwriting system.

(ii) For purposes of this paragraph (a)(35), an “automated underwriting system” means an electronic tool developed by a securitizer, Federal government insurer, or Federal government guarantor of closed-end mortgage loans or open-end lines of credit

that provides a result regarding the credit risk of the applicant and whether the covered loan is eligible to be originated, purchased, insured, or guaranteed by that securitizer,

Federal government insurer, or Federal government guarantor. A person is a securitizer, Federal government insurer, or Federal government guarantor of closed-end mortgage loans or open-end lines of credit, respectively, if it has ever securitized, provided Federal government insurance, or provided a Federal government guarantee for a closed-end mortgage loan or open-end line of credit.

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#2253606 - 05/06/21 07:48 PM Re: Loan Prospector Decision Just a girl
Compliance NABW Offline
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Joined: Oct 2015
Posts: 1,597
This topic is pretty tricky and very dependent on exactly what type of AUS you used, who ended up purchasing the loan, etc. You can find more information in the Official Interpretation to 12 CFR 1003.4(a)(35). The FIG is helpful as well in showing which reporting codes generally coincide with which systems and which outputs (Refer, Eligible, etc.) https://s3.amazonaws.com/cfpb-hmda-public/prod/help/2020-hmda-fig.pdf (See Pages 102-105).

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#2253607 - 05/06/21 07:52 PM Re: Loan Prospector Decision Just a girl
Compliance NABW Offline
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Joined: Oct 2015
Posts: 1,597
I recognize now you mentioned LP in the title. Assuming LP was the only AUS used and you sold to Freddie, then the following should get you what you need:

"The AUS of the Federal Home Loan Mortgage Corporation (Freddie Mac) commonly returns results that correspond to Codes 8, 9, 10, 11, 12, and 13. If more than one result is returned on the Feedback Certificate, report the Risk Class result. If your result(s) differ, report the AUS result(s) received."

Based on what Codes 8-13 represent, I would find it very likely you would report "Accept" here.
Last edited by Compliance NABW; 05/06/21 07:54 PM.
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