Reporting Purchased Loans on the HMDA LAR

Inquiry/Issue

The Bank has recently started purchasing loans that would be HMDA reportable if they originated with the Bank.  Since these loans did not close in the Bank’s name and the Bank is not making the credit decision, does the Bank report them on the HMDA LAR?

Response Summary

The Bank is required to report data for all loans it purchased during the calendar year described in the HMDA LAR, following specific reporting requirements.

Response Detail

Purchased loans are reported for the purposes of the Home Mortgage Disclosure Act (“HMDA”). Regulation C, which gives effect to HMDA, requires an institution to report data in the HMDA Loan Application Register (“HMDA LAR”) for all loans it originated and purchased during the calendar year described in the report, though not for loans it declined to purchase. 12 CFR §1003.4(a)(1)(i); Staff Commentary, ¶4(a)(8)-3.

When reporting data on the HMDA LAR, the FFIEC’s “A Guide to HMDA Reporting: Getting it Right!” includes specific reporting rules for some of the fields for purchased loans:

• Date Application Received: Enter N/A
• Action Taken: Enter code 6 only
• Property Location: Report the location by census tract in an MSA or Metropolitan Division where the institution has a home or branch office, even if the originating institution did not have a home or branch office in that MSA or Metropolitan Division and did not collect the property location information.
• Amount of Loan: Enter the unpaid principal balance of the loan at the time of purchase.
• Owner Occupancy: Enter code 1 unless the loan documents or application indicate that the property will not be owner-occupied as a principal residence.
• Applicant GMI: The institution has the option of collecting and reporting ethnicity, race, sex, and income of applicant and co-applicant for purchased loans, but if it does not report that information, it should use the appropriate codes for N/A for the ethnicity, race, and sex fields and N/A for the income field
• Request for Preapproval: Enter code 3
• Rate Spread: Enter N/A
• Lien Status: Enter code 4

The remaining HMDA LAR fields (i.e., Application or Loan Number, Loan Type, Property Type, Purpose, Action Taken Date, Property Location, Gross Annual Income, Type of Purchaser [if loan is sold to another entity in the same calendar year], and HOEPA Status) are completed with the appropriate information for the purchased loans.

 

This entry was posted on Monday, November 23rd, 2015 at 2:00 pm.