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#92359 - 06/27/03 07:23 PM
HMDA Reportable or Not?
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Anonymous
Unregistered
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At this institution: Unsecured loans have a purpose code of "02" regardless of the actual purpose. They have a collateral code of "110". As I understand it,loans are reported to the credit bureau are reported by purpose codes. I'm told that reporting an unsecured loan to the credit bureau any other way would make that loan show up as a secured loan.
When I've pulled applications, the loan officer has place a phrase that indicates the purpose of the loan for example is home improvement...such as the purchase of a central heating unit for the home.
In the Getting It Right Guide, it states the definition of a home improvement loan is a loan made for the purpose of home improvement AND is classified by the institution as a home-improvement loan.
Should I report it on HMDA or not? I'm thinking not, because it is not "classified" as such. However, my mind says it really is......
What should I do?
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#92360 - 06/27/03 07:33 PM
Re: HMDA Reportable or Not?
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100 Club
Joined: Dec 2002
Posts: 195
Eastern KY
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Our I/T input plays games somedays, one loan will be a Home Improvement to install the heat pump and unsecured; the next loan for an unsecured loan for the purpose of home improvement will be input with a different code. For "getting it right" , your example should be included on your LAR and the HMDA report as a home improvement. The classification at the input level is the devil. We are probably the only bank that has this trouble.
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#92362 - 06/27/03 07:42 PM
Re: HMDA Reportable or Not?
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10K Club
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
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First I believe all home improvement loans should be classified as such and reported. With that said:
Anon, do you otherwise "classify" your unsecured loans as home improvements for HMDA reporting purposes? If you do not then I would not report this loan.
As you said the loan must be classified as a HI loan by the FI to be reportable. A simple notation in the file for the purpose of the loan is not classifying the loan IMO.
The loan has to be classified by file color codes, identifying "stickers" on the folders or systematice codings, etc. in order to be reportable IMO.
Other thoughts on this. I'm really just throwing this out for discussion.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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#92364 - 06/27/03 07:53 PM
Re: HMDA Reportable or Not?
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10K Club
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
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That's my point. It has to be classified/identified as a HI loan, and I don't think the purpose of the loan on the application or in the credit memo qualifies as classifying.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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#92365 - 06/27/03 07:53 PM
Re: HMDA Reportable or Not?
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Anonymous
Unregistered
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The only procedure we have in place is that if the application states it is home improvement than it is reported.
With that said...I will report.
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#92366 - 06/27/03 07:55 PM
Re: HMDA Reportable or Not?
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Anonymous
Unregistered
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Quote:
I don't think the purpose of the loan on the application or in the credit memo qualifies as classifying.
Oops!!!!! Maybe I won't????????????????
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#92369 - 06/27/03 08:41 PM
Re: HMDA Reportable or Not?
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Anonymous
Unregistered
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If I'm an examiner (or compliance officer) and I want a list of loans classified as HI loans, how will you get those for me?
I have a code "17" that is the code used for HI loans. I would pull the query Now, if you were the examiner you would not know that in code 02 there are home improvement loans unless you looked specifically into one of the folders ...probably the chances of you finding that would be slim .......Right??????
But, you understand, that as a Compliance Officer, I am worried that you are really a "go-getter" and will find one of those loans.....
Ok... now I won't report them.......I'll take my chances....
Thanks for the help!!!!!!!!!!!!!!
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#92370 - 06/30/03 03:02 PM
Re: HMDA Reportable or Not?
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Power Poster
Joined: Apr 2001
Posts: 4,828
Between the lines
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Dan, good idea about the color folders, however; we should also consider a method to identify the files in the system rather than hard copy. For example, our examiners do not ever see a "hard" file. We image our loan docs and provide images to examiners. We also provide temporary access to image system during exam and they review files from a remote branch using one of our PCs with their own login. I think a code in the system works best for us. With the increasing reliance on technology, we will need to rethink the way we do things.
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NOLA is my Beach!
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#92371 - 06/30/03 03:33 PM
Re: HMDA Reportable or Not?
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10K Club
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
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SoccerMom, I agree the best place to identify them is in the system.
All "consumer" loans are class 20 on our system, but we have separate purpose codes that identify the loan as an auto, home improvement, etc.
I made the other suggestion becasue I took from the original post that Anon had a system limitation of identifying these loans on the system.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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