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#69581 - 03/25/03 04:03 PM HMDA LAR
Anonymous
Unregistered

I just discovered that my institution has been filing incorrect data on the HMDA LAR for the past 5 years. Do we need to re-file? If so, for how many years back? Also, do penalties apply. The problem appears to be due to ignorance and not malicious intent. I just joined the organization 10 months ago and just discovered the error.

Pease advise!!

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General Discussion
#69582 - 03/25/03 04:15 PM Re: HMDA LAR
Andy_Z Offline
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Andy_Z
Joined: Oct 2000
Posts: 27,748
On the Net
You may need to discuss it with your regulator. I don't believe there will be much gained from resubmissions from years gone by, but 2002 may be another story. Also, if your HMDA is to be used or was used in a CRA exam, there could be implications there, depending on the errors.

Are they at the 10% mark for resubmission?
_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#69583 - 03/25/03 04:21 PM Re: HMDA LAR
Miss Kitty Offline
Platinum Poster
Joined: Mar 2002
Posts: 721
California
Quote:

I just discovered that my institution has been filing incorrect data on the HMDA LAR for the past 5 years.



Do you mind if I ask what kind of errors and was this not picked up from any past audits?

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#69584 - 03/25/03 04:27 PM Re: HMDA LAR
Anonymous
Unregistered

The error was not picked up previously. The error invloves the coding of Withrawns, counteroffers and conditional approvals. It appears that many conditional approvals that should have been coded as a decline were coded as an approved not accepted, ditto for the counteroffers that did not close.

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#69585 - 03/25/03 04:29 PM Re: HMDA LAR
Anonymous
Unregistered

The error is that we have a very high percentage of approved not accepted loans in the LAR and a very low percentage of declines. I beleive that it does exceed the 10% threshold for these two types of action taken codes.

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#69586 - 03/25/03 05:48 PM Re: HMDA LAR
Anonymous
Unregistered

If you are talking about Quality Errors, don't resubmit.

If you are talking about Validity Errors, don't you have some software that helps you find and fix?

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#69587 - 03/25/03 06:34 PM Re: HMDA LAR
Andy_Z Offline
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Andy_Z
Joined: Oct 2000
Posts: 27,748
On the Net
These are errors in key fields. It really doesn't matter that it is a Quality or Validity error, wrong is wrong and a 2002 resubmission may be needed. The error codes won't pick it up because it appears to be correct, but isn't.

Correction of prior years may be needed, at least internally if this will be used in CRA. My first call would be to the HMDA Help Line, my next to my examiner, both AFTER briefing management.
_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#69588 - 03/25/03 06:52 PM Re: HMDA LAR
Don_Narup Offline

Power Poster
Joined: Jul 2001
Posts: 3,708
Las Vegas Nevada
It all depends on the applicant information as to having a Fair Lending issue, but changing records from, Approved not Accepted, to Decline, has a Fair Lending impact.

It would be prudent to see what type of impact this change in Action Taken will have on your decline data, with regards to tract income classifications, race and gender issues. It may not have any at all, but you need to take a look.

I would recommend you refile your 2002 data now. As Andy suggested how far back you may have to go is something you would check with your regulatore on.

_________________________
Compliance Analysis and Research - Software for your CRA/HMDA analysis needs

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#69589 - 03/25/03 07:07 PM Re: HMDA LAR
HRH Dawnie Offline
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HRH Dawnie
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
http://www.occ.treas.gov/ftp/bulletin/2000-35a.pdf

As Andy and Don mentioned, resubmission of the 2002 data is probably a good idea (I'd do it if I were in your shoes) but you MUST be sure management is with you on this! Sending it in now, verses being asked to do an entire scrub is a wise decision.

For future issues, you might want to check out the website I just posted. These are the OCC's guidelines for examiners and they include a data integrity test. Outlined are the areas they consider to be significant, and the guide for allowable errors. Since you've already determined you're over 10%...you're understanding that this is significant is great. Many would hide and hope it didn't bite them in the bumm in the future.

As to the other years, the determination on their impact in your next exam is a key issue. If your HMDA data is reviewed, and you know it to be in error, you should at least consider resubmitting the data for the period of your next exam. Going back further would be a waste of time. Speaking with your examiner on this issue is a must. If they know you're going to clean up the data prior to their visit they'll give you some credit for your diligence.

Good luck!
_________________________
Dawn Coursey VP/CRA Queen

CRA Rating is in...Oh who cares...I'm home with the baby.

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#69590 - 03/25/03 07:30 PM Re: HMDA LAR
hmdagal Offline
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hmdagal
Joined: Dec 2002
Posts: 3,841
Your examiners will also want to ensure that you've taken steps to prevent these types of errors from happening again. In addition to more HMDA training, I'ld do a complete scrub of non-originated loans for 2003 and add a 100% review of these files until you are confident that they are being recorded correctly on the LAR.

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#69591 - 03/25/03 09:38 PM Re: HMDA LAR
campste Offline
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campste
Joined: Jun 2002
Posts: 145
LA
I would agree with Andy, but this discussion leads me to another question regarding HMDA Data Collection. If the banking industry is to provide additional data beginning in January, 2004, is there going to be a new LAR introduced to collect this new data. How are the BOL gang handling training and new software issues with data collection. We use the FFIEC software for CRA and HMDA. Will the new LAR's be ready for '04?

Comments are not necessarily those of any sane person. You don't have to be crazy to be in compliance but it helps!!

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#69592 - 03/25/03 09:57 PM Re: HMDA LAR
Andy_Z Offline
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Andy_Z
Joined: Oct 2000
Posts: 27,748
On the Net
Yes there will be new LARs and codes, etc. Your software vendors and mainframe folks (if applicable) need to be working on this as we "speak". The Fed is gathering comments now on how to handle the transition for apps gathered in 2003 and closed in 2004, as an example. So while all the questioned are not answered, there is sufficient data to start the early changes that are needed.

On the other hand, you do not want to "release these changes into the wild" yet because they cannot be used at this time. We'll do training late in the year.
_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#69593 - 03/25/03 10:28 PM Re: HMDA LAR
HRH Dawnie Offline
Power Poster
HRH Dawnie
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
Personally I'm going to join the circus in 2004. It sounds as wackey as the new HMDA collection requirements, and you get all the peanuts you can steal from the elephants.

Training will be a key, but I'd agree with Andy, it's not time yet. I refuse to talk to the IT department. I'll just hide my head in the sand and hope they figure it out (ok i'm kidding!)
_________________________
Dawn Coursey VP/CRA Queen

CRA Rating is in...Oh who cares...I'm home with the baby.

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