In January, HMDA process changes moved our cheese. Many questions have arose since, so we’ve provided answers to some of the most frequently asked.
Q. Why don’t I have any data on the HMDA extract?
HMDA screens must be completed for data to appear on the HMDA extract report.
Q. Who is responsible for filling out the relied upon questions?
When the Credit Union has reviewed the loan application and/or DU findings and makes the determination if the loan meets qualifications for financing, a credit decision is made. The lender within the Credit Union who made that credit decision is the one responsible for making completing the relied upon questions.
Q. When should relied upon questions be completed?
The relied upon questions should be completed as soon as the lender has made the credit decision and decides to proceed or not proceed with the transaction.
Q. Where can I get census tract data?
The census tract data will come from the flood determination when ordered. In the event a flood determination is never ordered due to an adverse action or other factor, then the census tract will be received if you choose to use the questsoft data interface method. Lenders may also search addresses for census tract data at https://geomap.ffiec.gov/FFIECGeocMap/GeocodeMap1.aspx
Q. Are prequalifications reportable to HMDA?
Prequalifications are not reportable to HMDA. That being said, it is important to understand that prequalifications are different than preapprovals. Preapprovals are reportable. So what is the difference?
A prequalification is an informal estimate of the loan amount for which an applicant might qualify. Prequalifications are not formal commitments to lend, and do not go through a full credit underwrite.
A preapproval is a commitment to lend, subject only to identification of the property. All income, assets, and credit are verified. A preapproval request is fully credit approved and only needs to identify an acceptable property.
Credit Union lenders should have a formal policy defining their prequalification and preapproval programs.
Q. Are incomplete applications reportable to HMDA?
Incomplete applications are reportable. Incomplete preapproval requests are not reportable under HMDA.
A file should only be reported as “file closed for incompleteness” when a written notice of incompleteness was provided and the applicant did not respond to your request for additional information within the time specified in the notice. If no notice of incompleteness is provided, the loan should be reported as denied.