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Collection Method Questions for HMDA

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This question has come up before but I have not seen a clear answer. If the application is NOT taken face to face, how should the collection method questions be answered for HMDA? Code 3 (NA) is only supposed to be for applications where the requirement to report the data does not apply to the covered loan. We would use code 3 on applications where it is an entity. Code 2 (not based on visual observation) would be the only choice that would make sense. What are your thoughts?

This has been discussed many times in the HMDA forums. You are right that Code 3 (NA) is only to be used for applications made by an entity, but also when a loan is purchased. Otherwise, Code 1 or 2 should be used. If the application is not taken in person, Code 2 is the only logical choice and the correct answer.

Through discussions with the CFPB attorney's, they say they plan to clarify this issue, but have not done so yet.

First published on 01/26/2020

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