Identify HMDA Reporting Rules - Nationwide Multistate Licensing System NMLS

1. What is the primary purpose of HMDA data collection and public disclosure?

   To monitor lending, enforce fair lending, and assess community credit needs. HMDA data helps regulators and the public identify discriminatory lending patterns and ensure credit availability in underserved areas.

2. Which statement best describes HMDA public disclosure obligations for a financial institution?

   HMDA data are submitted and certain data are made available to the public per law. Public disclosure promotes transparency, enabling scrutiny of lending practices to enforce anti-discrimination laws.

3. Identify the HMDA event that triggers LAR reporting: application, origination, or both?

   Both: report covered applications and covered originations. Regulation C requires reporting all covered applications, including those resulting in originations, to capture full lending activity.

4. Which document is the institution's HMDA submission file of loan-level records called?

   Loan/Application Register (LAR). The LAR compiles detailed records of covered loan applications and originations for annual submission to regulators under HMDA.

5. Which federal law and implementing regulation govern HMDA data collection and reporting?

   Home Mortgage Disclosure Act; Regulation C (12 CFR 1003). HMDA mandates data collection on home mortgage lending, with Regulation C providing the detailed rules for implementation and compliance.

6. What is the HMDA rule for reporting whether the loan is subject to an affordable housing program?

   Report the affordable units/affordable housing indicator fields when applicable. This reporting identifies loans supporting affordable housing initiatives, aligning with HMDA's community development goals.

7. Which property types are generally HMDA-covered when the loan is a dwelling-secured transaction?

   1–4 family dwellings, multifamily dwellings, and manufactured homes as dwellings. HMDA covers loans secured by residential properties to assess lending patterns across various housing types.

8. Which action taken outcomes must be reported on the HMDA LAR for a covered application?

   Originated, approved not accepted, denied, withdrawn, closed for incompleteness. These outcomes reflect the final disposition of applications, ensuring comprehensive tracking of lending decisions under HMDA.

9. Which institutions are generally subject to HMDA: depository, nondepository, or both?

   Both, if they meet Regulation C coverage and loan-volume thresholds. Regulation C applies to financial institutions originating sufficient covered loans, regardless of depository status, to promote broad monitoring.

10. Which loan categories are generally HMDA-covered: closed-end mortgages, open-end lines, or both?

    Both, if they meet Regulation C coverage (dwelling-secured and not excluded). Regulation C includes both loan types to provide a complete picture of dwelling-secured credit extensions.

11. Which location fields must be reported to geocode a HMDA-covered property?

    Property address and census tract (via geocoding), plus state and county/MSA. Geocoding enables mapping of lending patterns to assess geographic disparities and community reinvestment needs.

12. What is the HMDA rule for reporting a preapproval request under a preapproval program?

    Report covered preapprovals: approved not accepted and denied (per Reg C). Preapprovals under a defined program are treated as applications, requiring reporting of specific outcomes to monitor early-stage denials.

13. Which underwriting data points are generally HMDA-reportable for covered loans and applications?

    Loan amount, action date, denial reasons, credit score, and DTI (as applicable). These metrics provide insight into credit decision-making processes for regulatory review of lending practices.

14. What is the HMDA rule for collecting ethnicity, race, and sex on a face-to-face application?

    Collect using applicant self-identification; if not provided, note based on observation. This method prioritizes applicant choice while requiring observation to ensure accurate demographic data for fair lending oversight.

15. Which pricing fields are generally reported for HMDA covered loans when applicable?

    Interest rate, points and fees, lender credits, and rate spread (as applicable). Pricing data reveal cost structures and potential disparities, supporting HMDA's fair lending enforcement objectives.

16. Which construction method field is reported for HMDA covered home purchase or refinance loans?

    Construction method: site-built or manufactured home. This distinction identifies property types, allowing targeted analysis of lending in manufactured housing markets.

17. Which occupancy categories are reported for a HMDA-covered dwelling-secured loan?

    Principal residence, second residence, or investment property. Occupancy type distinguishes usage, helping evaluate lending for primary housing versus investment properties.

18. Which loan purpose must be reported if the loan is dwelling-secured but not home purchase or refinance?

    Home improvement (if it meets the Regulation C definition). Loans classified as home improvement capture dwelling enhancements, ensuring reporting of all relevant secured transactions.

19. Identify the HMDA rule for reporting the applicant's income: what income is used?

    Report income relied on in making the credit decision (if applicable/required). Reporting relied-upon income ensures data reflect actual underwriting factors for accurate assessment of affordability decisions.

20. What is the HMDA requirement for reporting the loan's lien status (first, subordinate, or not secured)?

    Report lien status for covered transactions as required by Reg C data fields. Lien status indicates loan priority, aiding analysis of risk and layering in mortgage portfolios.

21. What must a lender do if an applicant declines to provide ethnicity, race, or sex and there is no visual observation?

    Report "not provided" (and do not guess without observation/surname rules). Regulation C prohibits estimation without basis to maintain data integrity and avoid biased assumptions in non-visual applications.

22. Which applicant demographic fields does HMDA generally require collecting and reporting?

    Ethnicity, race, sex, and age (per Reg C data fields). These demographics enable analysis of fair lending compliance and disparities in mortgage access across protected groups.

23. What does HMDA mean by a "dwelling" for coverage purposes?

    A residential structure, whether or not attached to real property. This broad definition ensures inclusion of diverse housing like mobile homes for comprehensive mortgage data collection.

24. What is the HMDA "action date" that must be reported for an application?

    The date the creditor took final action on the application. This date marks the conclusion of the application process, standardizing reporting timelines under Regulation C.

25. Identify the key transaction types HMDA covers for dwelling-secured lending.

    Home purchase, home improvement, and refinancing (dwelling-secured). These purposes align with HMDA's goal of tracking loans that affect housing access and community development.

Study these flashcards