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#2271866 - 06/20/22 03:09 PM Loan in LOS that are "suspended"
Compliance0411 Offline
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Joined: Jun 2022
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If you have loans in your LOS that have not been officially decisioned and in the "suspended" state, how do you treat them for HMDA? I believe we need to go through each file and determine the date it was either, Denied, Approved not accepted, or withdrawn according to HMDA definitions, with the appropriate date, even if that means we have to refile because many of them are for the prior year. Is that the correct approach. Naturally I am getting push back and others just want to decision them in the current year and not refile. Please advise... any help will be appreciated.

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#2271868 - 06/20/22 04:31 PM Re: Loan in LOS that are "suspended" Compliance0411
raitchjay Online
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I don't know what a 'suspended' application would mean...there's certainly no support for that in Reg B or HMDA. There is certainly no exemption from HMDA reporting for 'suspended' applications. These loan applications should have been decisions within the Reg B timeliness (and the process cleaned up going forward).
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#2271869 - 06/20/22 05:06 PM Re: Loan in LOS that are "suspended" Compliance0411
rlcarey Online
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rlcarey
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Galveston, TX
I was having similar thoughts.

You have a couple of things going on here. You stated: " believe we need to go through each file and determine the date it was either, Denied, Approved not accepted, or withdrawn according to HMDA definitions".

1) That is true and if you do that, then you will know the volume of loans not reported for previous years in order to make the call on whether to refile your HMDA LAR or not. (HMDA Violation)

2), If any of these files were denied without an adverse action notice being sent, then adverse action notice should be generated and sent to the borrowers. (Reg B Violation)

3) If these applications were never dispositioned, then you are left with the task to figure out what happened and disposition them. (HMDA and Reg B Violation) Likely, they were all actually denied for incompleteness.
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#2271871 - 06/20/22 05:57 PM Re: Loan in LOS that are "suspended" rlcarey
Compliance0411 Offline
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Posts: 26
Ok so I am on the right track with my thinking. I think the majority of these loans were closed for incompleteness and just not updated in the LOS. However, depending on the volume it could necessitate a refiling. What is the threshold for refiling your HMDA data if it is wrong?

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#2271873 - 06/20/22 06:50 PM Re: Loan in LOS that are "suspended" Compliance0411
rlcarey Online
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rlcarey
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Galveston, TX
Just keep in mind, if you failed to send a notice of incompleteness, then you are looking at "denied" for incompleteness. That is going to look very bad to your regulator and might trigger a fair lending exam depending on the demographics of the individuals involved in these applications.

There are resubmission guidelines for errors. https://files.consumerfinance.gov/f...miner-transaction-testing-guidelines.pdf

There is no standard for the number of files that have been omitted - see top of page 3.

A financial institution may be directed to resubmit its HMDA LAR in order to include reportable applications or loans that examiners determine were previously omitted from the HMDA LAR

Once you get a count, you should contact your EIC for direction.
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#2271875 - 06/20/22 07:39 PM Re: Loan in LOS that are "suspended" Compliance0411
Compliance0411 Offline
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I believe the majority of these loans are incomplete and were furnished with and NOI just not updated in the LOS. In those cases it is closed for incompleteness correct?

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#2271876 - 06/20/22 07:44 PM Re: Loan in LOS that are "suspended" Compliance0411
rlcarey Online
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rlcarey
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Galveston, TX
If you sent them an appropriate NOI and the applicant did not respond, then yes, those could be coded as closed for incompleteness.
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#2271878 - 06/20/22 08:28 PM Re: Loan in LOS that are "suspended" rlcarey
Compliance0411 Offline
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Posts: 26
Thank you for your help.

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