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#2268003 - 03/21/22 10:01 PM Fannie Mae vs HMDA LAR Date Rate Set-LOS Challenge
Help! Compliance Offline
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Joined: Oct 2012
Posts: 93
San Antonio, TX
During our preparation for Fannie Mae direct delivery and a new LOS implementation, we found Fannie Mae’s definition regarding the CurrentRateSetDate. It differs from the HMDA definition as it relates to lock extensions. Do you have any insight as to how other lenders deal with this differing definition? Do other lenders manually edit the HMDA Rate-set date on the LAR as we do now? Or do they have a separate editable field within their LOS to enter the HMDA Rate-set date? Any information you can provide will be greatly appreciated. Thanks!

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#2268009 - 03/22/22 01:11 PM Re: Fannie Mae vs HMDA LAR Date Rate Set-LOS Challenge Help! Compliance
rlcarey Offline
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rlcarey
Joined: Jul 2001
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Galveston, TX
Can you explain the difference?

FNMA

a. MAPPING GUIDANCE
4.2.1 Although the same interest rate data point will be also used to populate 20.2 when applicable, it appears only once in the XML file. Along with the note amount, the related GSE-Specific data point required to support Data Clarity, Current Rate Set Date, (the date the final interest rate was locked in with the borrower) must be provided in the UCD file.


HMDA

5. Rate-set date. The relevant date to use to determine the average prime offer rate for a comparable transaction is the date on which the interest rate was set by the financial institution for the final time before final action is taken (i.e., the application was approved but not accepted or the covered loan was originated).
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#2268015 - 03/22/22 02:05 PM Re: Fannie Mae vs HMDA LAR Date Rate Set-LOS Challenge rlcarey
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From the interpretation of Mortgage, it appears that there is not the same consideration of necessary rate lock extensions. While HMDA views extensions as reportable events, Mortgage does not believe FNMA, other investors, and common practice view them as such.

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#2268021 - 03/22/22 02:38 PM Re: Fannie Mae vs HMDA LAR Date Rate Set-LOS Challenge Help! Compliance
Dan Persfull Offline
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Bloomington, IN
From the interpretation of Mortgage, I assume that is your mortgage department.

Current Rate Set Date, (the date the final interest rate was locked in with the borrower)

the date on which the interest rate was set by the financial institution for the final time before final action is taken

If the rate lock is extended on 3/22/2022 and the loan closed on 3/25/2022 then how is 3/22/2022 not the final date the rate was set with the borrower before final action was taken?

"Common practice" - a search of the threads will prove them wrong for that interpretation.

A rate lock extension is re-locking the rate so I'm at a loss as to how they do not think the date the rate was relocked would not be the date the rate was last set with the borrower.
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#2268035 - 03/22/22 04:16 PM Re: Fannie Mae vs HMDA LAR Date Rate Set-LOS Challenge Help! Compliance
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San Antonio, TX
This is what the Fannie Mae UNIFORM CLOSING DATASET FAQ Updates document says (below). This is what they are referencing.

"21. What is the CurrentRateSetDate and where is it found?

In the UCD specification, the CurrentRateSetDate is the last date that the note rate on a loan was established. This includes the first time the rate is set as well as any time the rate was changed prior to closing.

Note: that this does NOT include any action to extend a lock period, since the rate does not change for just an extension. The CurrentRateSetDate is used to evaluate the Note Rate, and therefore, it must correspond to the date on which the rate was set."
Last edited by pp1865; 03/22/22 04:17 PM.
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#2268040 - 03/22/22 04:59 PM Re: Fannie Mae vs HMDA LAR Date Rate Set-LOS Challenge Help! Compliance
rlcarey Offline
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rlcarey
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Galveston, TX
Well, that does sort of flies in the face as how a lot of the industry interprets the rate set date requirements.
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#2268128 - 03/23/22 05:37 PM Re: Fannie Mae vs HMDA LAR Date Rate Set-LOS Challenge Help! Compliance
Inherent_Risk Offline
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The purpose of the rate spread is to determine how that transaction compares to the APOR at the time the rate is set. If the rate is locked based on investor prices at a certain time (i.e. the original lock date), and the the pricing in effect at that time is used through different extensions, then I think it makes a ton of sense (practically speaking) to use the original lock date for the APOR from the time the pricing is actually pulled from. I don't think the regulation is as clear as Randy and Dan suggest it is saying otherwise either. What is meant by "exercises discretion?"

Quote
i. Rate-lock agreement. If an interest rate is set pursuant to a “lock-in” agreement between the financial institution and the borrower, then the date on which the agreement fixes the interest rate is the date the rate was set. Except as provided in comment 4(a)(12)-5.ii, if a rate is reset after a lock-in agreement is executed (for example, because the borrower exercises a float-down option or the agreement expires), then the relevant date is the date the financial institution exercises discretion in setting the rate for the final time before final action is taken. The same rule applies when a rate-lock agreement is extended and the rate is reset at the same rate, regardless of whether market rates have increased, decreased, or remained the same since the initial rate was set. If no lock-in agreement is executed, then the relevant date is the date on which the institution sets the rate for the final time before final action is taken.

Has there been any official guidance on this making it clear that an extension automatically changes the rate set date? I know for fair lending analysis comparing rate spreads, resetting the rate set date based on extensions, muddies the water of the analysis. If borrower A and borrower B, both got the same pricing at application, and borrower B ended up needing an extension 45 days later after pricing has changed, you're not going to be comparing apples to apples. The purpose of the metric is served by using the date the pricing actually comes from.

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