Type of Purchaser

Could someone tell me when would you use a code 9 (other type of purchaser) on the LAR? Thanks in advance.

Rarely...preferably never in my FED examiners' minds. Go to the National Information Center of the FFIEC website here. Enter the investor's name. The institution type will tell you what code to use. Per aforementioned FEDs, Domestic Entity Other = code 7 for HMDA.

Truffle - is there any written guidance on this other than in the examiner's mind. We have used 9 pretty much across the board on loans sold secondary and the FDIC is doing a HMDA data intergrity review. Using 9 has not been an issue the last 2 exams.

Thanks!

I have always taken the view (and regulators I have had the pleasure of meeting took the same view) that purchaser code is a key field and is therefore expected to be accurate. Sorting by type of purchaser is one of the ways the regulators slice and dice the data that is published. Providing one generic answer is not accurate. You are expected to accurately identify the types of purchaser.

I have had clients cited for this and made to correct and resubmit.

Further, if you put the wrong purchaser code, ie: 6/commercial bank when it should be 7 for banks shown on the register as Domestic Entity Other, you could be made to correct and resubmit.

I don't know how you got by with 9s. We were called on that the first year I was here. We only use 9 for VA loans now.

Thanks Truffle and Kaybee - looks like a resubmit coming....

I have done a search on this, but am seeing some conflicting answers. I am looking to confirm what purchaser type code should be reported by institutions selling loans in the Mortgage Partnership Finance (MPF) program through the Federal Home Loan Bank (FHLB). Some posts indicate code 7 since they are a "domestic entity other", while others indicate code 9. The issue is that I can find nothing that equates a domestic entity other one of those listed as a possible code 7 in HMDA Getting it Right.

As Kaybee stated above, and I'm living proof of, you do NOT want to use 9 for anything you have evidence should be a specific code. (I'm at home now and all my references are at work or I'd check for you.)

Examiners have gotten more strict on this issue in recent years. FRB examiners use the Federal Register. HMDA is a Federal regulation. I'd use what the Register says.

Thanks. I certainly understand the risk in using the "other" category. Since my post, I had heard back from the FRB's HMDA help line and the response was report the FHLB as a 9. Hmmm.

Not that I'm doubting either of you, but where is there any written guidance stating that we must use the National Information Center search to identify the type of purchaser? If so, does anyone have what institution type corresponds to each HMDA purchase code? For example, if we're not supposed to use 9, then what code should we use for a non-member bank, state member bank, or bank holding company?

That's the same thing David Dickinson asked when I shared this information with him. There is none. I'm sharing with you that my Fed examiners said go to NIC and put in the bank name and use the information there to get the correct HMDA code. As Kay pointed out, using too many 9s is a flag to examiners to dig deeper. Use at your own risk.

So how does everyone code the entities who do not show up on NIC? Some are obviously finance companies, etc. But what about those that aren't so easily identified?

I can usually find most of them but often have to try numerous variations of their name or follow a trail to a parent company. Whatever you decide to go with, document the living daylights out of it so you're not stuck trying to figure out why you coded it a 9 when it's now on the system as a 7 plain as day. I go in and check at the beginning of the year for all investors we're using at that time. I've taken to rechecking in December to make sure nobody merged or bought something that changed their code. It ain't easy. And it bugs me that there's no official guidance on this.

As others have already mentioned - wish there was more direct guidance on purchaser codes! In looking at what we have reported - too many coded as 9. If the NIC site indicates the institutional type as a National Bank then it should be coded purchaser type 6 = commercial bank - correct? Institutional type of Non-Member Banks would be reported with the same code of 6 - correct?
Thanks!

I've got a National Bank here that shows:
Activity: Commercial Banking.
That should be coded 6 - Commercial Bank per my Fed Examiners.

Another is shown as Institution Type: Domestic Entity Other
I was told to use 7 - Life insurance company, credit union, mortgage bank or finanace company for these.

Haven't come across a Non-Member Bank yet so I hesitate to call that one for you.

I don't believe that being a member of the Fed or not should change the category for HMDA purposes. It has no bearing on the category.

Of course it doesn't, Kay. I was just saying answering JSD's question as to what 'domestic entity other' or 'national bank' translates to as a purchaser code. And I cited my source for the translation which is my Fed Examiner.

My response was for JSD!

I am wondering if anyone has additional information on what purchaser type code should be reported by institutions selling loans in the Mortgage Partnership Finance (MPF) program through the Federal Home Loan Bank (FHLB). Looks like some posts indicate code 7 since they are a "domestic entity other", while others indicate code 9.

Can anyone help clarify?

Did you try entering this on the NIC site I linked earlier in this thread? When I put in FHLB I got four different hits. Without knowing an office or any other info, I can't pick one for you.

If FHLB is actually purchasing, I would be inclined to use 9, like loans sold to the VA. FHLB does not fit any of the other categories. They are not a "bank" like a commercial bank, savings, etc. They are cooperatives owned by their member banks.

You could possibly make a case for a 7 but they are not a mortgage bank, life insurance company, credit union or finance company.

I would use 9 and defend it to the end.

I just heard back from the HMDA help line and was instructed to use "9" for FHLB.

Truff & Kaybee - thank-you both for your help.

YAY!

Are loans still considered "purchased" if they are divested along with the sale of an entire branch?

So based on these NICs, what HMDA codes would you use for a
- Thrift Holding Company
- Non-Deposit Trust Company

Reviving this thread, (an oldie, but a goodie)
Now that we have Purchaser Codes 71 and 72, what do we do with "Domestic Entity Other"?

I'm thinking 71, but would like some input on that.