We just started purchasing loans from another FI. We are NOT servicing these loans, the originating FI will continue to service them. When reporting these loans on the HMDA LAR, can I accept the originated FI's HCML-HOEPA test results that state the loan is not a HOEPA loan even if the data compiled for the test is wrong...like, closing date, rate, APR rate, etc.?

So, you are saying you are purchasing loans on which the original lender did not do the regulatory testing correctly? If they messed up the Section 32 testing, that means they screwed up the Section 35 and 43 testing also.

If there is a defect in the loan the bank should not be buying them. Why would you accept that (holder in due course) risk?

Then ask yourself, how do you explain to a regulator, plaintiff's attorney, etc. that "Yes that is what WE reported but THEY did the calculations or documents wrong. We knew it was in error, but it wasn't our fault because we needed these loans."

Certainly there should be repurchase agreements, but that also depends on how many of these errors there could be and the sellers solvency.

Thank you rlcarey and Andy_Z, appreciate the feedback. I'm meeting with my boss this morning to discuss these loans, and this helps tremendously.