Important HMDA Changes effective in 2017 and 2018 pursuant to the CFPB's 2015 HMDA Rule

2/28/2017 - By Kristen Stogniew, Esq., CFE

Happy HMDA submission day. Hopefully all of you have reviewed your LARs and feel pretty good about their accuracy. Now, it's time to start thinking about collecting 2017 data.

First, did you have less than 25 home purchase and refinance entries on your 2016 or 2015 LAR? If so, then you can celebrate, at least temporarily, because you are not subject to HMDA data collection and reporting in 2017. (...we will pause to give you a moment to celebrate...)

If you ARE subject to collecting 2017 data, you should go ahead and download the new LAR formatting software and start using it to record your LAR entries. The FFIEC Data Entry Software cannot be used to submit your 2017 entries.

We are facilitating a HMDA readiness status conference call on Tuesday, March 28th, from 11:00 a.m. until Noon EST. If you would like to be on the call, please make sure you have signed up to join one of your LOS user groups. Mark your calendars, and I will send the invite to those who have signed up to any LOS system list as of March 24th.

In the meantime, you may want to further analyze your 2016 lending activity to see if you could be exempt from the 2018 changes. The lending activity test for HMDA data collection beginning 1/1/18 is different. It looks to whether you originated, in 2016 and 2017, 25 or more home Closed End Mortgage Loans, which means any consumer purpose, non-temporary, closed-end loan secured by a dwelling, (regardless of whether it was on your HMDA LAR so, for example, cash out equity loans would be counted); PLUS any commercial purpose, non-temporary, closed-end loan secured by a dwelling and made for the purpose of home improvement, home purchase, or refinance of a home purchase loan (these would be on your 2016 LAR but you need to ADD any construction-only loans that are repaid from something other than permanent financing, such as spec or construction to builders). A second test to determine whether you are subject to data collection on 1/1/18 on open end lines of credit, is whether you originated, in 2016 and 2017, 100 or more Dwelling-secured Open End Lines of Credit (consumer or business purpose).

So, since these tests have to be met on 2016 lending activity for 2018 rules to apply, you should go ahead and look to see whether you are off the hook, or still in the running for compliance with the (massive) 2018 changes.

We look forward to working with you through the year toward HMDA 2018 implementation. Please do not hesitate to email me if you have any questions.