OK - thanks Dan. I think I'm following now...

Here is the e-mail that I received from HMDA Help:

We apologize for the confusion. The revisions to the 2004 HMDA Guide are primarily clarification changes. There were no regulatory changes made; suggested regulatory changes will be considered during the next Regulation C review. Therefore, as far as the collecting and reporting of data goes, it should not be much different from the collection and processing of 2005 HMDA data.

The only two issues that will affect the 2006 HMDA data collection deal with the asset threshold for 2006 ($35 million) and the changing of the Sebastian-Vero Beach, FL MSA code 46940 to MSA code 42680. (The only county in MSA 426880 is Indian River (code 061)).

I hope this clears things up.

HMDAHelp

Thanks for posting that reply.... it's clear as mud. I'm reading it that we don't have to change the "occupancy" for this year's reporting but will next year or from this point forward??

Steve, I appreciate your time in doing this. However, I went back to read your original email to them and I didn't notice you mentioning the reporting change on page 12. To me this is a very significant change in reporting. It appears to me it's another case of them not knowing what's going on.

We still don't have our answer, does the 7/06 Letter or the 10/06 GIR govern?

Agreed, Dan. In my white-hot haste to send an e-mail, I neglected to mention the page 12 change. And I also thought the same thing when I read the e-mail: so does the 07/06 letter govern, or the 10/06 GIR release?

I don't think their e-mail clears things up at all.

Email sent to HMDA Help 10/26/06.

The following is from the introduction to the October 2006 GIR posted on your Web page.

The 2006 version should be used for guidance on collecting and reporting calendar year (CY) 2006 data (due March 1, 2007);

There is a major change in reporting the occupancy status of the property.

Page 12, 2004 GIR:

Occupancy. For a one-to-four-family dwelling, including a manufactured home, indicate whether the property to which the loan or application relates will be the borrower’s principal dwelling.

Page 12, 2006 GIR:

Occupancy. For a one-to-four-family dwelling, including a manufactured home, indicate whether the property to which the loan or application relates will be the owner’s principal dwelling.

Under the 2004 GIR guidance if I pledge my primary dwelling for my son's loan to purchase a dweling the occupancy status would be reported as 2 since the dwelling secuirng the loan is not the borrower's primary dwelling. Under the 2006 GIR guidance the occupancy status for this same loan would be reported as 1 since the dwelling is the owner's primary dwelling.

From the 2006 Guide Information Letter issued July 10, 2006;

The 2004 Guide on the Web should be used for guidance on collection and reporting of calendar year 2006 HMDA data due March 1, 2007.

Which guidance do we follow for collecting and reporting purposes for calendar year 2006 due March 1, 2007, the October 2006 release of the GIR or the July 10, 2006 Guide Information Letter?

Thank you,

Dan Persfull

Good e-mail, Dan! Let's see if they respond to the precise and specific points that you addressed.

Here's the rsponse I got this morning.


Mr. Persfull,
I am going to pass this question up. I agree with your assessment and I do know that they did not intend to change any reporting criteria. I will get back to you when I get a response. Thanks!






To: <hmdahelp@frb.gov>
cc:
10/31/2006 08:50 Subject: FW: 2006 GIR Clarification
AM




Due to the potential impact this has on reporting the occupancy status on the LAR for the 2006 data I would appreciate a prompt response. If we have to report the occupancy status based on the owner's occupancy then I and other financial institutions are going to have to re-scrub their 2006 data to date to make the appropriate changes. This release of the 2006 GIR this late in the year has the potential of greatly impacting the larger reporters.

I just got a telephone call from Washington DC. The person I spoke with asked me not to publish their name. But in a nutshell the guidance in the 2006 GIR is to be followed.

Based on my conversation with this person, which BTW was very nice, the 2004 GIR was an error. According to this person we should have had always been reporting on the owner's occupancy.

Whether you should scrub your data is a risk decision for you to make and/or discuss with your primary regulator. (This is my statement and does not come from my conversation with the person out of Washington DC.)

I emailed HMDA help briefly after Dan did. I used the same example Dan did, as I wanted to see if I would receive a similar or an entirely different response. This is the email I got:

The 2006 updates have clarified the term "borrower" on page 12 in the Guide to Reporting to be consistent with the code terminology for occupancy in Appendix A, I.A.6 and staff comment 203.4(a)(6)-1. Both references are phrased using "owner" and not "borrower".

In your particular example below -- (Under the 2004 GIR guidance if I pledge my primary dwelling for my son's loan to purchase a dwelling the occupancy status would be reported as 2 since the dwelling securing the loan is not the borrower's primary dwelling. Under the 2006 GIR guidance the occupancy status for this same loan would be reported as 1 since the dwelling is the owner's primary dwelling.) -- the reporting should be as follows:

Whether you follow the 2004 or 2006 Guide to Reporting, the occupancy code should be reported as a 1 because your example involves multiple properties (reference staff comment 203.2(h)-1.). And for reporting Occupancy--multiple properties, refer to 203.4(a)(6)-1 -- you would be using your primary dwelling as the reported property location (because your property is given as security on the home purchase loan). In that case, the owner-occupancy status would be reported as a 1 {which is the owner-occupancy status of the property for which property location is being reported -- (your) primary dwelling)}.

Also, regarding your question about which version of the Guide to Reporting to use for the collection and reporting of the 2006 LAR -- please use the
2006 version of the GIR. The asset threshold for 2006 was updated ($35
million) and the MSA for Sebastian-Vero Beach FL was changed to 42680 -- both of these reminders were included in the July 10, 2006 Guide Information Letter.

Thanks for using HMDAHELP.


I have to check some of the references in the email, but it is clearly stated that 2006 HMDA GIR should be used. Unfortunately, there is no name in the email, but I will be printing it for my records and to back up any changes I make to my HMDA data.

There was an error in the 2004 GIR on page 12 when it referred to "borrower's principal dwelling". In the 2004 GIR appendix and the Staff Commentary included in the 2004 GIR, the term was "owner occupancy" (see A2 in the Appendix). So there was a contradiction within the 2004 GIR. Apparently the Agencies recognized the contradiction in the 2004 GIR and were trying to quietly correct the inconsistency in the new 2006 GIR language. The intention always seems to have been to use owner occupancy as the criteria.

This is giving me a headache.

It is giving everyone a big headache. I too contacted HMDA help and was told to follow THE OLD RULES. The response was that they were trying to align terminology on Page 12 with the owner occupied terminology in Appendix A and staff commentary, not necessarily change reporting.

I gave them the old language and new language and an example of a loan where the owner of the collateral is not the borrower. I was told it would take a few days to get back to me as they needed to discuss this with the manager.

This morning I received an email saying we should follow the old borrow focused reporting, not owner. I sent a clarifying email saying:

"Just to clarify, we should
classify the property as owner occupied
if it is the borrower's principal residence, just as has been done
previously. Is that what you are saying?


The response was "Yes".

I was given the managers name and number if I wished to discuss further. I have a class I have to go to tomorrow a.m. but as soon as I am free, I will call!

The new way makes no sense, but they need to make up their minds!

Can you start a thread with a poll???

We can all email/call HMDA help, then vote based on what they tell us!!

BTW, I don't think that the person who answered ACBbank's question understood it, b/c the question did not mention a loan secured by multiple properties. On the "bright" side, at least they are as confused as we are.

Ok, I have spoken to highest counsel of all. His opinion supercedes the FDIC, OTS, OCC, etc. Bob Barker has declared that HMDA is no longer applicable and FI's no longer must report information on any loans.

Thank goodness you're all as confused as I was when I read this on my way out the door yesterday! I just turned off my computer and told myself I'd deal with it in the morning.

This may be the first time that Texas Homestead laws have actually been beneficial when it comes to HMDA reporting! Unless I'm missing something, it seems the restrictions we have would keep this from being a problem for us.

F/U Email I got from the telephone conversation:

Hi Dan,

Per our phone conversation today, the term "borrower" should have been "owner". We clarified the term "borrower" on page 12 in the Guide to Reporting to be consistent with the code terminology for occupancy in Appendix A, I.A.6 and staff comment 203.4(a)(6)-1. Both references are phrased using "owner" and not "borrower".

In your particular example below -- (Under the 2004 GIR guidance if I pledge my primary dwelling for my son's loan to purchase a dwelling the occupancy status would be reported as 2 since the dwelling securing the loan is not the borrower's primary dwelling. Under the 2006 GIR guidance the occupancy status for this same loan would be reported as 1 since the dwelling is the owner's primary dwelling.) -- the reporting should be as follows:

Whether you follow the 2004 or 2006 Guide to Reporting, the occupancy code should be reported as a 1 because your example involves multiple properties (reference staff comment 203.2(h)-1.). And for reporting Occupancy--multiple properties, refer to 203.4(a)(6)-1 -- you would be using your primary dwelling as the reported property location (because your property is given as security on the home purchase loan). In that case, the owner-occupancy status would be reported as a 1 {which is the owner-occupancy status of the property for which property location is being reported -- (your) primary dwelling)}.

Also, regarding your question about which version of the Guide to Reporting to use for the collection and reporting of the 2006 LAR -- please use the 2006 version of the GIR. The asset threshold for 2006 was updated ($35
million) and the MSA for Sebastian-Vero Beach FL was changed to 42680 -- both of these reminders were included in the July 10, 2006 Guide Information Letter.

Thanks for using HMDAHELP.

Manager, CRA/HMDA Operations Unit