Home Mortgage Disclosure Act Overview
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Questions and Answers

What should a lender do if an applicant provides incorrect or inappropriate information about their race or ethnicity?

  • Correct the information based on their knowledge.
  • Report the information as provided by the applicant. (correct)
  • Ignore the incorrect information and make assumptions.
  • Contact the applicant for clarification.

How may an applicant choose to handle the reporting of their race and ethnicity?

  • They can only report through a phone call.
  • They must always provide this information.
  • They may elect to not report it. (correct)
  • They can provide false information without consequence.

When is it allowable to describe information as 'not provided by the applicant'?

  • When the applicant explicitly states their race or ethnicity.
  • When the application is submitted in person.
  • When the application is completed via mail, internet, or telephone. (correct)
  • When the lender lacks sufficient information to process the application.

Which of the following information is NOT typically included in the application for a loan?

<p>Rejected application reasons for those who qualify. (D)</p> Signup and view all the answers

What aspect of a loan application specifies how the applicant's race or ethnicity was collected?

<p>Coding within the LAR. (D)</p> Signup and view all the answers

What is the primary purpose of the Home Mortgage Disclosure Act (HMDA)?

<p>To collect and disclose data about mortgage lending activities. (D)</p> Signup and view all the answers

Which agency was responsible for implementing Regulation C before the Consumer Financial Protection Bureau took over?

<p>Federal Reserve Board (C)</p> Signup and view all the answers

What type of properties are included in the definition of 'dwelling' under HMDA?

<p>Single-family homes and multifamily structures (D)</p> Signup and view all the answers

When must lenders file the HMDA Loan Application Register (LAR)?

<p>By March 1 of the year following data collection. (C)</p> Signup and view all the answers

What information is NOT required to be reported under HMDA?

<p>Credit score of the applicant (B)</p> Signup and view all the answers

Which of the following accurately describes the nature of data collected under HMDA?

<p>It requires loan application information regardless of loan closure. (A)</p> Signup and view all the answers

Which of the following is a requirement placed upon lenders due to HMDA?

<p>Collecting and reporting information about loan applications. (A)</p> Signup and view all the answers

Which group primarily uses the data obtained through HMDA reporting?

<p>Government agencies for investment and regulatory oversight. (B)</p> Signup and view all the answers

Flashcards

Lender's Race/Ethnicity Duty

Lenders must not change race/ethnicity information provided by applicants, even if incorrect or inappropriate. Applicants can choose not to report race/ethnicity.

Applicant's Race/Ethnicity Choice

Applicants can choose not to report race and ethnicity. The lender will report based on observation in this case.

Data Collection Methods Coding

LAR (Loan Application Register) codes specify how applicant information was collected (e.g., visually, surname).

Missing Applicant Information

Lenders can record "Information not provided" if applicant omits data in certain application methods like mail, internet, or phone.

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Loan Details Reporting

Loan applications must include loan pricing/terms, HOEPA status, property information (if not pre-approval), underwriting details (credit, LTV, AUS), MLO NMLS number, and loan disposition/reason if denied.

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HMDA (Home Mortgage Disclosure Act)

A disclosure law requiring mortgage lenders to report data about loans and loan applications.

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HMDA's purpose

To collect and disclose data on mortgage loans, applications, and to monitor potential discrimination.

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HMDA data types

Applicant demographics (ethnicity, race, sex, age, income), and loan details, including the type of dwelling.

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Reporting frequency

Lenders report annually to the CFPB by March of the following year.

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HMDA dwelling definition

Any residential structure (attached or not), including vacation homes, rentals, and manufactured homes.

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Exclusions from HMDA

Recreational vehicles (boats, campers), and transitory residences (hotels, hospitals).

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HMDA LAR

Loan Application Register, a log of loan application information lenders maintain.

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Applicant self-reporting of ethnicity and race

Lenders report the information provided by the applicant, not their own judgment.

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Study Notes

Home Mortgage Disclosure Act (HMDA)

  • HMDA, 12 CFR Part 1003 (Regulation C), enacted in 1975, requires mortgage lenders to collect, report, and disclose data on loans.
  • Regulation C's rule-writing authority transferred to the CFPB in 2011.
  • HMDA is a disclosure law, not a prohibitory or quota law.
  • The data is used by government agencies to allocate housing investments, address housing market failures, and monitor potential discrimination. Data is publicly available.
  • Reporting is annual, based on information collected at loan application.

HMDA Reporting Requirements

  • Reports cover loans secured by various residential structures (dwellings).
  • "Dwelling" definition is broader than other federal laws; covers vacation homes, rental properties, condos, co-ops, manufactured/mobile homes––not recreational vehicles, temporary housing.
  • Data includes applicant demographics (ethnicity, race, sex, age, gross income).
  • Applicant-reported ethnicity/race is not corrected. Applicants can choose not to provide this data; when omitted, reporting by observation may be necessary.
  • Information collection methods (e.g., mail, internet, telephone application) are recorded.
  • Loan details, pricing, terms, and HOEPA status are reported.
  • Property details (if not a pre-approval) are reported.
  • Underwriting details (credit scores, LTV ratios, AUS use) are collected.
  • MLO NMLS number included.
  • Loan disposition information (withdrawn, denied, reasons for denial, secondary market sale details).
  • The LAR (Loan Application Register) is a record maintained by lenders; submitted to the CFPB by March 1 of the following year.

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Description

This quiz explores the Home Mortgage Disclosure Act (HMDA), its requirements, and its implications for housing investments and discrimination monitoring. Learn about the reporting obligations, the types of dwellings covered, and the importance of the data collected by mortgage lenders. Test your knowledge on how HMDA impacts the housing market.

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