[Mary Beth Devillier]

I’ve had a couple of loans that are falling under a same scenario as far as what to report with income for HMDA purposes. These loans are in-house refinances due to maturities. The Officer does all the normal required underwriting (updating financial information, collecting income, etc.) to refinance the debt, but the borrow now has a higher DTI than our policy states, but their credit risk hasn’t changed much. The officer wants to report NA for income in these situations, stating that we would make this loan anyway, but I am thinking we do need to report the income. We do not have a streamlined refinance policy to cover situations like this, so I am leaning to report since the officer has gathered the information and figured their DTI. Report or no?

Topic

[pparks]

You stated earlier, “The Officer does all the normal required underwriting (updating financial information, collecting income, etc.) to refinance the debt…,” so it sounds like both income and DTI were considered in the credit decision (thus reported). Whether or not he would have done the loan anyways is immaterial. As you stated, “the officer gathered the information and figured their DTI.” I am curious though…was a policy exception approved for the DTI that was higher than policy allows? I am sure what he is doing and why is adequate justification (as it seems you run across it often enough). However, it does seem like it would be best practice to create a policy or add to your current policies instructions on how your institution will address these circumstances consistently…which would then require no policy exception…or at least provide an acceptable consistent universal justification.

[Kimberly Boatwright, CAMS, CRCM]

I agree with @pparks, Since the Income was collected and updated to figure a DTI. It would need to be HMDA reportable. I also agree with the need to have a policy to have consistency.

[Author]

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