General Info for Lenders

Posted By: referwithcaution

General Info for Lenders - 04/25/22 02:27 PM

I am preparing a brief "article" of sorts for our organizational news letter. We have had issues with lenders omitting demographic and other types of data. I will cover this, but want to also take the opportunity to provide pertinent basic information. There is not a significant amount of HMDA knowledge in our organization, so I want to have a few basics that pertain directly to Lenders day-to-day operations in the article. If you were sending out HMDA basics in an article like this, what points would you make sure to drive home?

This article will need to share space with a section on CRA, so it does need to be somewhat brief.

Any and all advice is welcome. I am new here.
Posted By: InFairness, CRCM

Re: General Info for Lenders - 04/25/22 02:34 PM

The importance of accuracy and completeness of data, including regulatory risk if data is not accurate and complete. Maybe why it's important - I've found people cooperate more with getting HMDA data right if they understand why.
Posted By: Melissa S

Re: General Info for Lenders - 04/25/22 05:09 PM

I've had an issue where the loan officer did not collect all the pertinent information on the proposed collateral to a loan request at the initial meeting. This was an issue later when I had to go to him for the detail, which he didn't have. If you have a borrower that you've denied, there's no way the borrower is going to help you after being declined. So, I would emphasize the importance of ensuring ALL RE information is collected UP FRONT: location, units, subsidized, square footage of commercial vs residential mixed-use, etc.
Posted By: Rocky P

Re: General Info for Lenders - 04/27/22 03:43 PM

Try this.
With HMDA, there are important information capture and reporting requirements.
1 - The information must be complete in order for the HMDA data to pass edit checks and sent to the regulators.
2 - Regulators will validate the HMDA data prior to an examination. If there is more than a 5% error rate in any field, the bank will have to refile.
3 - Most importantly, regulators WILL use the HMDA data to analyze the Banks CRA and our FAIR LENDING. This includes redlining and difference in treatment of any applicant. Because the HMDA submission has a lot of data, they can perform a fair lending examination electronically, even before we are aware of it. ACCURACY IS IMPORTANT