HMDA is coming …Review #1

Article By: Ben Giumarra, Spillane Consulting Associates, Inc. While Ben's away, Gregg will play ... a special [re]issue of the Wednesday compliance newsletter while Ben is on vacation, with commentary from Gregg. Alright, Ben's traveling through Australia, probably trying to remember to drive on the opposite side of the road, and probably listening to a playlist frustratingly including an equal mix of songs by Jim Croce, Volbeat, and Taylor Swift (*shake my head in disgust). So get a chance … [Read more...]

HMDA Analysis for More than Just Compliance…

Article By: Ben Giumarra, Spillane Consulting Associates, Inc. Are you missing an opportunity when you review your HMDA LAR to look beyond technical reporting errors? Does the LAR data have more to tell you? When I first met John, he asked me: Is it possible for our clients to not only survive these regulatory changes (Dodd-Frank), but actually benefit from them? Well, classic case of John asking a question that seems innocent enough at first, but that actually guides you towards a much … [Read more...]

How much of TRID will help with HMDA?

Article By: Ben Giumarra, Spillane Consulting Associates, Inc. We've spent a lot of time learning TRID and other rules written by the CFPB over the past 5 years. To what extent can we rely on some of those lessons, principles, and definitions to carry over to the last major Dodd-Frank mortgage regulatory reform item (HMDA)? Good news and bad news. Good news first - some of the new data points required by HMDA are carried over from TRID or Ability-to-Repay principles. So assuming we put in the … [Read more...]

Future (aka Trailing) Compensation on HELOCs?

Article By: Ben Giumarra, Spillane Consulting Associates, Inc. Could banks and credit unions exploit an advantage over non-depositories with a shift in how they compensate for HELOCs? I don't think this will work for all institutions. But I'm curious why the following wouldn't work in certain cases. Read on and see if you agree that how banks and credit unions compensate employees for HELOCs might give it a unique competitive advantage. Observations Let's start off with some initial … [Read more...]

HMDA “Loans in Limbo”: 2017-2018 Timing Issue

Article By: Ben Giumarra, Spillane Consulting Associates, Inc. Remember this later with that 2017-18 reporting window, but also understand now if you're thinking strategically about HMDA 2018. We know that January 1, 2018 is the date new HMDA data collection rules kick in. But what exactly do we do with "loans in limbo" - loans where we take an application in 2017 but don't take final action until 2018?   Side note: I bet a lot of people are going to have this question, but only for … [Read more...]

Should You Delay Appraisal Delivery Until After Review?

Article By: Ben Giumarra, Spillane Consulting Associates, Inc. A common grip from borrowers - could compliance concerns be getting in the way unnecessarily? Sick of borrowers complaining "Where is my appraisal? The appraiser was here  a month ago!" Well, you're not alone. Especially for refinances in markets where housing prices are fluctuating, this can be one of the most anxious parts of the mortgage process for a borrower. What's my house worth? Is it going to be enough?    Often, … [Read more...]

HMDA Exemptions for Commercial Loans

Article By: Ben Giumarra, Spillane Consulting Associates, Inc. Let's build off of last week's newsletter and discuss the significance of identifying a loan as business-purpose. So last week we discussed how the new HMDA rules require us to report whether every single loan is "business-purpose" (thus exempt from Regulation Z) or "consumer-purpose." This is one of a couple of ways for a loan to be exempt from Reg Z. Exemptions for Business-Purpose Loans I wanted to provide a convenient … [Read more...]

HMDA: Distinction Between Consumer-Purpose and Business-Purpose Loans

Article By: Ben Giumarra, Spillane Consulting Associates, Inc. Let's discuss an old regulatory definition that will become more important when HMDA revisions take effect. Distinction Gets More Important With CFPB As far back as the Truth-in-Lending Act goes, it has only applied to "consumer-purpose" transactions. The regulations that define the distinction between consumer-purpose and business-purpose (it can only be one or the other) are unchanged. But until the Dodd-Frank and the CFPB … [Read more...]

Refresher on When a Revised Loan Estimate is NOT Necessary

Article By: Ben Giumarra, Spillane Consulting Associates, Inc. Seems like a good time to revisit this, as lenders continue to get more comfortable with TRID requirements and start to shred over-conservative policies and cut out instances of "over-compliance." Hypothesis I believe some lenders are issuing revised Loan Estimates too frequently, certainly more often than required by regulation. I believe this is, in part, because the industry still considers the LE a replacement for the GFE. I … [Read more...]

Increase in Fair Lending Attention Paid to Loan Servicing?

Article By: Ben Giumarra, Spillane Consulting Associates, Inc. Maybe ignored more often by servicing departments, fair lending is now becoming an issue that deserves at least some attention. Driven by the CFPB, regulators are starting to pay closer attention to fair lending issues in mortgage servicing departments. Fair lending examinations have previously focused more attention on origination activities, so this will represent somewhat of a shift. This started with regulators updating … [Read more...]