On July 24, 2104 the Consumer Financial Protection Bureau (CFPB) published proposed rules to implement changes to the Home Mortgage Disclosure Act (HMDA). Some of the proposed changes are mandated by the Dodd-Frank Act, others are part of a CFPB effort to modernize and streamline regulations. Comments on the 572-page proposal are due on or before October 22, 2014.
Coverage There had been speculation that coverage would be expanded to all mortgage lenders that originated more than 25 loans per year. The proposal reflects very little change from the current rules, except that financial institutions that originate fewer than 25 covered loans do not have to report
Expanded Data – Expanded data on the HMDA LAR includes the property value; term of the loan; total points and fees; the duration of any teaser or introductory interest rates; and the applicant’s or borrower’s age and credit score. The revised LAR will include more information about underwriting and pricing, such as an applicant’s debt-to-income ratio, the interest rate of the loan, and the total discount points charged for the loan. There are approximately 60 fields of data on the proposed HMDA LAR.
Types of Loans – The proposed rule will require that covered lenders report, with some exceptions, all loans related to dwellings, including reverse mortgages and open-end lines of credit. The proposal eliminates reporting of certain home improvement loans.
Aligning HMDA Reporting With Industry Data Standards – The CFPB is proposing methods to align the HMDA data requirements with the Mortgage Industry Standards Maintenance Organization (MISMO) standards for residential mortgages, including the Uniform Loan Delivery Dataset (ULDD) that is used in the delivery of loans to the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the government-sponsored entities (GSEs)).
Electronic Reporting Revisions – The CFPB is considering new technological tools to make the data submission process more efficient, ease the data formatting requirements and help financial institutions prevent errors.
For a copy of the proposal click here.