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6500 - Consumer Protection
{{10-29-04 p.7271}}
PART 203HOME MORTGAGE DISCLOSURE (REGULATION C) (Part
effective January 1, 2004)
Sec. 203.1
Authority, purpose, and scope.
203.2
Definitions.
203.3
Exempt institutions.
203.4
Compilation of loan data.
203.5
Disclosure and reporting.
203.6
Enforcement.
Appendix A to Part
203Form and Instructions for Completion of HMDA Loan/Application
Register.
Appendix B To Part
203Form And Instructions for Data Collection on Ethnicity, Race, and
Sex
Supplement I To Part
203Staff Commentary
AUTHORITY: 12 U.S.C.
2801--2810.
SOURCE: The provisions of this Part 203 appear at 67 Fed. Reg. 7236,
February 15, 2002, except as otherwise noted.
§ 203.1 Authority, purpose, and scope.
(a) Authority. This regulation is issued by the Board of
Governors of the Federal Reserve System ("Board") pursuant to the
Home Mortgage Disclosure Act ("HMDA") (12 U.S.C. 2801 et
seq.), as amended. The information-collection requirements have
been approved by the U.S. Office of Management and Budget ("OMB")
under 44 U.S.C. 3501 et seq. and have been assigned OMB
numbers for institutions reporting data to the Office of the
Comptroller of the Currency (1557--0159), the Federal Deposit Insurance
Corporation (3064--0046), the Office of Thrift Supervision
(1550--0021), the Federal Reserve System (7100--0247), and the
Department of Housing and Urban Development ("HUD") (2502--0529).
A number for the National Credit Union Administration is pending.
(b) Purpose. (1) This regulation implements the Home
Mortgage Disclosure Act, which is intended to provide the public with
loan data that can be used:
(i) To help determine whether financial institutions are serving
the housing needs of their communities;
(ii) To assist public officials in distributing public sector
investment so as to attract private investment to areas where it is
needed; and
(iii) To assist in identifying possible discriminatory lending
patterns and enforcing antidiscrimination statutes.
(2) Neither the act nor this regulation is intended to encourage
unsound lending practices or the allocation of credit.
(c) Scope. This regulation applies to certain financial
institutions, including banks, savings associations, credit unions, and
other mortgage lending institutions, as defined in § 203.2(e). The
regulation requires an institution to report data to its supervisory
agency about home purchase loans, home improvement loans, and
refinancings that it originates or purchases, or for which it receives
applications; and to disclose certain data to the public.
[Codified to 12 C.F.R. § 203.1]
§ 203.2 Definitions.
In this regulation:
(a) Act means the Home Mortgage Disclosure Act
("HMDA") (12 U.S.C. 2801 et seq.), as amended.
(b) Application. (1) In general.
Application means an oral or written request for a home purchase
loan, a home improvement loan, or a refinancing that is made in
accordance with procedures used by a financial institution for the type
of credit requested.
(2) Preapproval programs. A request for preapproval
for a home purchase loan is an application under paragraph (b)(1) of
this section if the request is reviewed under a program in which the
financial institution, after a comprehensive analysis of the
creditworthiness of
{{10-29-04 p.7272}}the applicant, issues a written
commitment to the applicant valid for a designated period of time to
extend a home purchase loan up to a specified amount. The written
commitment may not be subject to conditions other than:
(i) Conditions that require the identification of a suitable
property;
(ii) Conditions that require that no material change has occurred
in the applicant's financial condition or creditworthiness prior to
closing; and
(iii) Limited conditions that are not related to the financial
condition or creditworthiness of the applicant that the lender
ordinarily attaches to a traditional home mortgage application (such as
certification of a clear termite inspection).
(c) Branch office means:
(1) Any office of a bank, savings association, or credit union
that is approved as a branch by a federal or state supervisory agency,
but excludes free-standing electronic terminals such as automated
teller machines; and
(2) Any office of a for-profit mortgage-lending institution
(other than a bank, savings association, or credit union) that takes
applications from the public for home purchase loans, home improvement
loans, or refinancings. A for-profit mortgage-lending institution is
also deemed to have a branch office in an MSA or Metropolitan Division
if, in the preceding calendar year, it received applications for,
originated, or purchased five or more home purchase loans, home
improvement loans, or refinancings related to property located in that
MSA or Metropolitan Division, respectively.
(d) Dwelling means a residential structure (whether or
not attached to real property) located in a state of the United States
of America, the District of Columbia, or the Commonwealth of Puerto
Rico. The term includes an individual condominium unit, cooperative
unit, or mobile or manufactured home.
(e) Financial institution means:
(1) A bank, savings association, or credit union that:
(i) On the preceding December 31 had assets in excess of the
asset threshold established and published annually by the Board for
coverage by the act, based on the year-to-year change in the average of
the Consumer Price Index for Urban Wage Earners and Clerical Workers,
not seasonally adjusted, for each twelve month period ending in
November, with rounding to the nearest million;
(ii) On the preceding December 31, had a home or branch office in
an MSA;
(iii) In the preceding calendar year, originated at least one
home purchase loan (excluding temporary financing such as a
construction loan) or refinancing of a home purchase loan, secured by a
first lien on a one-to four- family dwelling; and
(iv) Meets one or more of the criteria:
(A) The institution is federally insured or regulated;
(B) The mortgage loan referred to in paragraph (e)(1)(iii) of
this section was insured, guaranteed, or supplemented by a federal
agency; or
(C) The mortgage loan referred to in paragraph (e)(1)(iii) of
this section was intended by the institution for sale to Fannie Mae or
Freddie Mac; and
(2) A for-profit mortgage-lending institution (other than a bank,
savings association, or credit union) that:
(i) In the preceding calendar year, either:
(A) Originated home purchase loans, including refinancings of
home purchase loans, that equaled at least 10 percent of its
loan-origination volume, measured in dollars; or
{{10-31-08 p.7273}}
(B) Originated home purchase loans, including refinancings of
home purchase loans, that equaled at least $25 million; and
(ii) On the preceding December 31, had a home or branch office in
an MSA; and
(iii) Either:
(A) On the preceding December 31, had total assets of more than
$10 million, counting the assets of any parent corporation; or
(B) In the preceding calendar year, originated at least 100 home
purchase loans, including refinancings of home purchase loans.
(f) Home-equity line of credit means an open-end credit
plan secured by a dwelling as defined in Regulation Z (Truth in
Lending), 12 CFR part 226.
(g) Home improvement loan means:
(1) A loan secured by a lien on a dwelling that is for the
purpose, in whole or in part, of repairing, rehabilitating, remodeling,
or improving a dwelling or the real property on which it is located;
and
(2) A non-dwelling secured loan that is for the purpose, in whole
or in part, of repairing, rehabilitating, remodeling, or improving a
dwelling or the real property on which it is located, and that is
classified by the financial institution as a home improvement loan.
(h) Home purchase loan means a loan secured by and made
for the purpose of purchasing a dwelling.
(i) Manufactured home means any residential structure as
defined under regulations of the Department of Housing and Urban
Development establishing manufactured home construction and safety
standards (24 CFR 3280.2).
(j) (1) Metropolitan Statistical Area or MSA means a
metropolitan statistical area as defined by the U.S. Office of
Management and Budget.
(2) Metropolitan Division or MD means a metropolitan division of
an MSA, as defined by the U.S. Office of Management and Budget.
(k) Refinancing means a new obligation that satisfies
and replaces an existing obligation by the same borrower, in which:
(1) For coverage purposes, the existing obligation is a home
purchase loan (as determined by the lender, for example, by reference
to available documents; or as stated by the applicant), and both the
existing obligation and the new obligation are secured by first liens
on dwellings; and
(2) For reporting purposes, both the existing obligation and the
new obligation are secured by liens on dwellings.
[Codified to 12 C.F.R. § 203.2]
[Section 203.2 amended at 68 Fed. Reg. 74830, December 29, 2003,
effective January 1, 2004]
§ 203.3 Exempt institutions.
(a) Exemption based on state law. (1) A state-chartered
or state-licensed financial institution is exempt from the requirements
of this regulation if the Board determines that the institution is
subject to a state disclosure law that contains requirements
substantially similar to those imposed by this regulation and that
contains adequate provisions for enforcement.
(2) Any state, state-chartered or state-licensed financial
institution, or association of such institutions, may apply to the
Board for an exemption under paragraph (a) of this section.
(3) An institution that is exempt under paragraph (a) of this
section shall use the disclosure form required by its state law and
shall submit the data required by that law to its state supervisory
agency for purposes of aggregation.
(b) Loss of exemption. An institution losing a state-law
exemption under paragraph (a) of this section shall comply with this
regulation beginning with the calendar year following the year for
which it last reported loan data under the state disclosure law.
[Codified to 12 C.F.R. § 203.3]
{{10-31-08 p.7274}}
§ 203.4 Compilation of loan data.
(a) Data format and itemization. A financial institution
shall collect data regarding applications for, and originations and
purchases of, home purchase loans, home improvement loans, and
refinancings for each calendar year. An institution is required to
collect data regarding requests under a preapproval program (as defined
in § 203.2(b)) only if the preapproval request is denied or results
in the origination of a home purchase loan. All reportable transactions
shall be recorded, within thirty calendar days after the end of the
calendar quarter in which final action is taken (such as origination or
purchase of a loan, or denial or withdrawal of an application), on a
register in the format prescribed in Appendix A of this part. The data
recorded shall include the following items:
(1) An identifying number for the loan or loan application, and
the date the application was received.
(2) The type of loan or application.
(3) The purpose of the loan or application.
(4) Whether the application is a request for preapproval and
whether it resulted in a denial or in an origination.
(5) The property type to which the loan or application relates.
(6) The owner-occupancy status of the property to which the loan
or application relates.
(7) The amount of the loan or the amount applied for.
(8) The type of action taken, and the date.
(9) The location of the property to which the loan or application
relates, by MSA or by Metropolitan Division, by state, by county, and
by census tract, if the institution has a home or branch office in that
MSA or Metropolitan Division.
(10) The ethnicity, race, and sex of the applicant or borrower,
and the gross annual income relied on in processing the application.
(11) The type of entity purchasing a loan that the institution
originates or purchases and then sells within the same calendar year
(this information need not be included in quarterly updates).
(12)(i) For originated loans subject to Regulation Z, 12 CFR part
226, the difference between the loan's annual percentage rate (APR)
and the average prime offer rate for a comparable transaction as of the
date the interest rate is set, if that difference is equal to or
greater than 1.5 percentage points for loans secured by a first lien on
a dwelling, or equal to or greater than 3.5 percentage points for loans
secured by a subordinate lien on a dwelling.
(ii) "Average prime offer rate" means an annual percentage
rate that is derived from average interest rates, points, and other
loan pricing terms currently offered to consumers by a representative
sample of creditors for mortgage loans that have low-risk pricing
characteristics. The Board publishes average prime offer rates for a
broad range of types of transactions in tables updated at least weekly,
as well as the methodology the Board uses to derive these rates.
(13) Whether the loan is subject to the Home Ownership and Equity
Protection Act of 1994, as implemented in Regulation Z (12 CFR 226.32).
(14) The lien status of the loan or application (first lien,
subordinate lien, or not secured by a lien on a dwelling).
(b) Collection of data on ethnicity, race, sex, and income.
(1) A financial institution shall collect data about the
ethnicity, race, and sex of the applicant or borrower as prescribed in
Appendix B of this part.
(2) Ethnicity, race, sex, and income data may but need not be
collected for loans purchased by the financial institution.
(c) Optional data. A financial institution may report:
(1) The reasons it denied a loan application;
(2) Requests for preapproval that are approved by the institution
but not accepted by the applicant; and
(3) Home-equity lines of credit made in whole or in part for the
purpose of home improvement or home purchase.
(d) Excluded data. A financial institution shall not
report:
{{10-31-08 p.7275}}
(1) Loans originated or purchased by the financial institution
acting in a fiduciary capacity (such as trustee);
(2) Loans on unimproved land;
(3) Temporary financing (such as bridge or construction loans);
(4) The purchase of an interest in a pool of loans (such as
mortgage-participation certificates, mortgage-backed securities, or
real estate mortgage investment conduits);
(5) The purchase solely of the right to service loans; or
(6) Loans acquired as part of a merger or acquisition, or as part
of the acquisition of all of the assets and liabilities of a branch
office as defined in § 203.2(c)(1).
(e) Data reporting for banks and savings associations that
are required to report data on small business, small farm, and
community development lending under CRA. Banks and savings
associations that are required to report data on small business, small
farm, and community development lending under regulations that
implement the Community Reinvestment Act of 1977 (12 U.S.C. 2901
et seq.) shall also collect the location of property located
outside MSAs and Metropolitan Divisions in which the institution has a
home or branch office, or outside any MSA.
[Codified to 12 C.F.R. § 203.4]
[Section 203.4 amended at 67 Fed. Reg. 43223, June 27, 2002,
effective January 1, 2004; 68 Fed. Reg. 74830, December 29, 2003,
effective January 1, 2004; 73 Fed. Reg. 63335, October 24, 2008,
effective October 1, 2009, compliance is mandatory for loan
applications taken on and after that date and for loans that close on
and after January 1, 2010 (regardless of their application
dates)]
§ 203.5 Disclosure and reporting.
(a) Reporting to agency. (1) By March 1 following the
calendar year for which the loan data are compiled, a financial
institution shall send its complete loan/application register to the
agency office specified in Appendix A of this part. The institution
shall retain a copy for its records for at least three years.
(2) A subsidiary of a bank or savings association shall complete
a separate loan/application register. The subsidiary shall submit the
register, directly or through its parent, to the agency that supervises
its parent.
(b) Public disclosure of statement. (1) The Federal
Financial Institutions Examination Council ("FFIEC") will prepare
a disclosure statement from the data each financial institution
submits.
(2) An institution shall make its disclosure statement (prepared
by the FFIEC) available to the public at its home office no later than
three business days after receiving it from the FFIEC.
(3) In addition, an institution shall either:
(i) Make its disclosure statement available to the public, within
ten business days of receiving it, in at least one branch office in
each other MSA and each other Metropolitan Division where the
institution has offices (the disclosure statement need only contain
data relating to the MSA or Metropolitan Division where the branch is
located); or
(ii) Post the address for sending written requests in the lobby
of each branch office in other MSAs and Metropolitan Divisions where
the institution has offices; and mail or deliver a copy of the
disclosure statement within fifteen calendar days of receiving a
written request (the disclosure-statement need only contain data
relating to the MSA or Metropolitan Division for which the request is
made). Including the address in the general notice required under
paragraph (e) of this section satisfies this requirement.
(c) Public disclosure of modified loan/application register.
A financial institution shall make its loan/application register
available to the public after removing the following information
regarding each entry: the application or loan number, the date that the
application was received, and the date action was taken. An institution
shall make its modified register available following the calendar year
for which the data are compiled, by March 31 for a request received on
or before March 1, and within thirty calendar days for
{{10-31-08 p.7276}}a request received after March
1. The modified register need only contain data relating to the MSA or
Metropolitan Division for which the request is made.
(d) Availability of data. A financial institution shall
make its modified register available to the public for a period of
three years and its disclosure statement available for a period of five
years. An institution shall make the data available for inspection and
copying during the hours the office is normally open to the public for
business. It may impose a reasonable fee for any cost incurred in
providing or reproducing the data.
(e) Notice of availability. A financial institution
shall post a general notice about the availability of its HMDA data in
the lobby of its home office and of each branch office located in an
MSA and Metropolitan Division. An institution shall provide promptly
upon request the location of the institution's offices where the
statement is available for inspection and copying, or it may include
the location in the lobby notice.
(f) Loan aggregation and central data depositories.
Using the loan data submitted by financial institutions, the FFIEC
will produce reports for individual institutions and reports of
aggregate data for each MSA and Metropolitan Division, showing lending
patterns by property location, age of housing stock, and income level,
sex, ethnicity, and race. These reports will be available to the public
at central data depositories located in each MSA and Metropolitan
Division. A listing of central data depositories can be obtained from
the Federal Financial Institutions Examination Council, Washington,
D.C. 20006.
[Codified to 12 C.F.R. § 203.5]
[Section 203.5 amended at 68 Fed. Reg. 74830, December 29, 2003,
effective January 1, 2004]
§ 203.6 Enforcement.
(a) Administrative enforcement. A violation of the act
or this regulation is subject to administrative sanctions as provided
in section 305 of the act, including the imposition of civil penalties,
where applicable. Compliance is enforced by the agencies listed in
section 305(b) of the Act (12 U.S.C. 2804(b)).
(b) Bona fide errors. (1) An error in compiling or
recording loan data is not a violation of the act or this regulation if
the error was unintentional and occurred despite the maintenance of
procedures reasonably adapted to avoid such errors.
(2) An incorrect entry for a census tract number is deemed a
bona fide error, and is not a violation of the act or this
regulation, provided that the institution maintains procedures
reasonably adapted to avoid such errors.
(3) If an institution makes a good-faith effort to record all
data concerning covered transactions fully and accurately within thirty
calendar days after the end of each calendar quarter, and some data are
nevertheless inaccurate or incomplete, the error or omission is not a
violation of the act or this regulation provided that the institution
corrects or completes the information prior to submitting the
loan/application register to its regulatory agency.
[Codified to 12 C.F.R. § 203.6]
Appendix A to Part 203--Form and Instructions for Completion of
HMDA Loan/Application Register
Paperwork Reduction Act Notice
This report is required by law (12 U.S.C. 2801--2810 and 12 CFR
203). An agency may not conduct or sponsor, and an organization is not
required to respond to, a collection of information unless it displays
a valid Office of Management and Budget (OMB) Control Number. See 12
CFR 203.1(a) for the valid OMB Control Numbers, applicable to this
information collection. Send comments regarding this burden estimate or
any other aspect of this collection of information, including
suggestions for reducing the burden, to the respective agencies and to
OMB, Office of Information and Regulatory Affairs, Paperwork Reduction
Project, Washington, DC 20503. Be sure to reference the applicable
agency and the OMB Control Number, as found in 12 CFR 203.1(a), when
submitting comments to OMB.
{{10-31-08 p.7276.01}}
I. Instructions for Completion of Loan/Application Register
A. Application or Loan Information
1. Application or Loan Number
a. Enter an identifying loan number that can be used later to
retrieve the loan or application file. It can be any number of your
institution's choosing (not exceeding 25 characters). You may use
letters, numerals, or a combination of both.
{{12-31-03 p.7277}}
2. Date Application Received
a. Enter the date the loan application was received by your
institution by month, day, and year. If your institution normally
records the date shown on the application form you may use that date
instead. Enter "NA" for loans purchased by your institution. For
paper submissions only, use numerals in the form MM/DD/CCYY (for
example, 01/15/2003). For submissions in electronic form, the proper
format is CCYYMMDD.
3. Type of Loan or Application
Indicate the type of loan or application by entering the applicable
code from the following:
Code 1--Conventional (any loan other than FHA, VA, FSA, or RHS
loans)
Code 2--FHA-insured (Federal Housing Administration)
Code 3--VA-guaranteed (Veterans Administration)
Code 4--FSA/RHS-guaranteed (Farm Service Agency or Rural Housing
Service)
4. Property Type
Indicate the property type by entering the applicable code from the
following:
Code 1--One-to four-family dwelling (other than manufactured
housing)
Code 2--Manufactured housing
Code 3--Multifamily dwelling
a. Use Code 1, not Code 3, for loans on individual condominium or
cooperative units.
b. If you cannot determine (despite reasonable efforts to find out)
whether the loan or application relates to a manufactured home, use
Code 1.
5. Purpose of Loan or Application
Indicate the purpose of the loan or application by entering the
applicable code from the following:
Code 1--Home purchase
Code 2--Home improvement
Code 3--Refinancing
a. Do not report a refinancing if, under the loan agreement, you
were unconditionally obligated to refinance the obligation, or you were
obligated to refinance the obligation subject to conditions within the
borrower's control.
6. Owner Occupancy
Indicate whether the property to which the loan or loan application
relates is to be owner-occupied as a principal residence by entering
the applicable code from the following:
Code 1--Owner-occupied as a principal dwelling
Code 2--Not owner-occupied as a principal dwelling
Code 3--Not applicable
a. For purchased loans, use Code 1 unless the loan documents or
application indicate that the property will not be owner-occupied as a
principal residence.
b. Use Code 2 for second homes or vacation homes, as well as for
rental properties.
c. Use Code 3 if the property to which the loan relates is a
multifamily dwelling; is not located in an MSA; or is located in an MSA
or an MD in which your institution has neither a home nor a branch
office. Alternatively, at your institution's option, you may report
the actual occupancy status, using Code 1 or 2 as applicable.
7. Loan Amount
Enter the amount of the loan or application. Do not report loans
below $500. Show the amount in thousands, rounding to the nearest
thousand (round $500 up to the next $1,000). For example, a loan for
$167,300 should be entered as 167 and one for $15,500 as 16.
a. For a home purchase loan that you originated, enter the
principal amount of the loan.
b. For a home purchase loan that you purchased, enter the unpaid
principal balance of the loan at the time of purchase.
c. For a home improvement loan, enter the entire amount of the
loan--including unpaid finance charges if that is how such loans are
recorded on your books--even if only a part of the proceeds is intended
for home improvement.
d. If you opt to report home-equity lines of credit, report only
the portion of the line intended for home improvement or home
purchase.
{{12-31-03 p.7278}}
e. For refinancings, indicate the total amount of the refinancing,
including both the amount outstanding on the original loan and any
amount of "new money."
f. For a loan application that was denied or withdrawn, enter the
amount applied for.
8. Request for Preapproval of a Home Purchase Loan
Indicate whether the application or loan involved a request for
preapproval of a home purchase loan by entering the applicable code
from the following:
Code 1--Preapproval requested
Code 2--Preapproval not requested
Code 3--Not applicable
a. Enter code 2 if your institution has a covered preapproval
program but the applicant does not request a preapproval.
b. Enter code 3 if your institution does not have a preapproval
program as defined in §203.2(b).
c. Enter code 3 for applications or loans for home improvement or
refinancing, and for purchased loans.
B. Action Taken
1. Type of Action
Indicate the type of action taken on the application or loan by
using one of the following codes.
Code 1--Loan originated
Code 2--Application approved but not accepted
Code 3--Application denied
Code 4--Application withdrawn
Code 5--File closed for incompleteness
Code 6--Loan purchased by your institution
Code 7--Preapproval request denied
Code 8--Preapproval request approved but not accepted (optional
reporting)
a. Use Code 1 for a loan that is originated, including one
resulting from a request for preapproval.
b. For a counteroffer (your offer to the applicant to make the loan
on different terms or in a different amount from the terms or amount
applied for), use Code 1 if the applicant accepts. Use Code 3 if the
applicant turns down the counteroffer or does not respond.
c. Use Code 2 when the application is approved but the applicant
(or the loan broker or correspondent) fails to respond to your
notification of approval or your commitment letter within the specified
time. Do not use this code for a preapproval request.
d. Use Code 4 only when the application is expressly withdrawn by
the applicant before a credit decision is made. Do not use code 4 if a
request for preapproval is withdrawn; preapproval requests that are
withdrawn are not reported under HMDA.
e. Use Code 5 if you sent a written notice of incompleteness under
§ 202.9(c)(2) of Regulation B (Equal Credit Opportunity) and the
applicant did not respond to your request for additional information
within the period of time specified in your notice. Do not use this
code for requests for preapproval that are incomplete; these
preapproval requests are not reported under HMDA.
2. Date of Action
For paper submissions only, enter the date by month, day, and year,
using numerals in the form MM/DD/CCYY (for example, 02/22/2003). For
submissions in electronic form, the proper format is CCYYMMDD.
a. For loans originated, enter the settlement or closing date.
b. For loan purchased, enter the date of purchase by your
institution.
c. For applications and preapprovals denied, applications and
preapprovals approved but not accepted by the applicant, and files
closed for incompleteness, enter the date that the action was taken by
your institution or the date the notice was sent to the
applicant.
{{12-31-03 p.7279}}
d. For applications withdrawn, enter the date you received the
applicant's express withdrawal, or enter the date shown on the
notification from the applicant, in the case of a written withdrawal.
e. For preapprovals that lead to a loan origination, enter the date
of the origination.
C. Property Location. Except as otherwise provided, enter in these
columns the applicable codes for the MSA, or the MD if the MSA is
divided into MDs, state, county, and census tract to indicate the
location of the property to which a loan relates.
1. MSA or Metropolitan Division. For each loan or loan application,
enter the MSA, or the MD number. MSA and MD boundaries are defined by
OMB; use the boundaries that were in effect on January 1 of the
calendar year for which you are reporting. A listing of MSAs and MDs is
available from your supervisory agency or the FFIEC.
2. State and County
Use the Federal Information Processing Standard (FIPS) two-digit
numerical code for the state and the three-digit numerical code for the
county. These codes are available from your supervisory agency or the
FFIEC.
3. Census Tract
Indicate the census tract where the property is located.
Notwithstanding paragraph 6, if the property is located in a county
with a population of 30,000 or less in the 2000 census, enter
"NA" (even if the population has increased above 30,000 since
2000), or enter the census tract number. County population data can be
obtained from the U.S. Census Bureau.
4. Census Tract Number. For the census tract number,
consult the resources provided by the U.S. Census Bureau or the FFIEC.
5. Property Located Outside MSAs or Metropolitan Divisions
For loans on property located outside the MSAs and MDs in which an
institution has a home or branch office, or for property located
outside of any MSA or MD, the institution may choose one of the
following two options. Under option one, the institution may enter the
MSA and MD, state and county codes and the census tract number; and if
the property is not located in any MSA or MD, it may enter "NA"
in the MSA or MD column. (Codes exist for all states and counties and
numbers exist for all census tracts.) Under this first option, the
codes and census tract number must accurately identify the property
location. Under the second option, which is not available if paragraph
6 applies, an institution may enter "NA" in all four columns,
whether or not the codes or numbers exist for the property location.
6. Data Reporting for Banks and Savings Associations Required To
Report Data on Small Business, Small Farm, and Community Development
Lending Under the CRA Regulations
If your institution is a bank or savings association that is
required to report data under the regulations that implement the CRA,
you must enter the property location on your HMDA/LAR even if the
property is outside MSAs or MDs in which you have a home or branch
office, or is not located in any MSA.
7. Requests for Preapproval
Notwithstanding paragraphs 1 through 6, if the application is a
request for preapproval that is denied or that is approved but not
accepted by the applicant, you may enter "NA" in all four
columns.
D. Applicant Information--Ethnicity, Race, Sex, and Income
Appendix B contains instructions for the collection of data on
ethnicity, race, and sex, and also contains a sample form for data
collection.
1. Applicability
Report this information for loans that you originate as well as for
applications that do not result in an origination.
a. You need not collect or report this information for loans
purchased. If you choose not to, use the Codes for "not
applicable."
b. If the borrower or applicant is not a natural person (a
corporation or partnership, for example), use the Codes for "not
applicable."
2. Mail, Internet, or Telephone Applications. All loan
applications, including applications taken by mail, Internet, or
telephone must use a collection form similar to that shown in appendix
B regarding ethnicity, race, and sex. For applications taken by
telephone, the information in the collection form must be stated orally
by the lender, except for information that pertains uniquely to
applications taken in writing. If the applicant does not
{{12-31-03 p.7280}}provide these data
in an application taken by mail or telephone or on the Internet, enter
the code for "information not provided by applicant in mail,
Internet, or telephone application" specified in paragraphs I.D.3.,
4., and 5. of this appendix. (See appendix B for complete information
on the collection of these data in mail, Internet, or telephone
applications.)
3. Ethnicity of Borrower or Applicant
Use the following codes to indicate the ethnicity of the applicant
or borrower under column "A" and of any co-applicant or
co-borrower under column "CA."
Code 1--Hispanic or Latino
Code 2--Not Hispanic or Latino
Code 3--Information not provided by applicant in mail, Internet,
or telephone application
Code 4--Not applicable
Code 5--No co-applicant
4. Race of Borrower or Applicant
Use the following Codes to indicate the race of the applicant or
borrower under column "A" and of any co-applicant or co-borrower
under column "CA."
Code 1--American Indian or Alaska Native
Code 2--Asian
Code 3--Black or African American
Code 4--Native Hawaiian or Other Pacific Islander
Code 5--White
Code 6--Information not provided by applicant in mail, Internet,
or telephone application
Code 7--Not applicable
Code 8--No co-applicant
a. If an applicant select more than one racial designation, enter
all Codes corresponding to the applicant's selections.
b. Use code 4 (for ethnicity) and code 7 (for race) for "not
applicable" only when the applicant or co-applicant is not a natural
person or when applicant or co-applicant information is unavailable
because the loan has been purchased by your institution.
c. If there is more than one co-applicant, provide the required
information only for the first co-applicant listed on the application
form. If there are no co-applicants or co-borrowers, use Code 5 (for
ethnicity) and Code 8 (for race) for "no co-applicant" in the
co-applicant column.
5. Sex of Borrower or Applicant
Use the following Codes to indicate the sex of the applicant or
borrower under column "A" and of any co-applicant or co-borrower
under column "CA."
Code 1--Male
Code 2--Female
Code 3--Information not provided by applicant in mail, Internet,
or telephone application
Code 4--Not applicable
Code 5--No co-applicant or co-borrower
a. Use code 4 for "not applicable" only when the applicant or
co-applicant is not a natural person or when applicant or co-applicant
information is unavailable because the loan has been purchased by your
institution.
b. If there is more than one co-applicant, provide the required
information only for the first co-applicant listed on the application
form. If there are no co-applicants or co-borrowers, use Code 5 for
"no co-applicant" in the co-applicant column.
6. Income
Enter the gross annual income that your institution relied on in
making the credit decision.
a. Round all dollar amounts to the nearest thousand (round $500 up
to the next $1,000), and show in thousands. For example, report $35,500
as 36.
{{10-31-08 p.7281}}
b. For loans on multifamily dwellings, enter "NA."
c. If no income information is asked for or relied on in the credit
decision, enter "NA."
d. If the applicant or co-applicant is not a natural person or the
applicant or co-applicant informaiton is unavailable because the loan
has been purchased by your institution, enter "NA."
E. Type of Purchaser
Enter the applicable code to indicate whether a loan that your
institution originated or purchased was then sold to a secondary market
entity within the same calendar year:
Code 0--Loan was not originated or was not sold in calendar year
covered by register
Code 1--Fannie Mae
Code 2--Ginnie Mae
Code 3--Freddie Mac
Code 4--Farmer Mac
Code 5--Private securitization
Code 6--Commerical bank, savings bank or savings association
Code 7--Life insurance company, credit union, mortgage bank, or
finance company
Code 8--Affiliate institution
Code 9--Other type of purchaser
a. Use Code 0 for applications that were denied, withdrawn, or
approved but not accepted by the applicant; and for files closed for
incompleteness.
b. Use Code 0 if you originated or purchased a loan and did not
sell it during that same calendar year. If you sell the loan in a
succeeding year, you need not report the sale.
c. Use Code 2 if you conditionally assign a loan to Ginnie Mae in
connection with a mortgage-backed security transaction.
d. Use Code 8 for loans sold to an institution affiliated with you,
such as your subsidiary or a subsidiary of your parent corporation.
F. Reasons for Denial
1. You may report the reason for denial, and you may indicate up to
three reasons, using the following codes. Leave this column blank if
the "action taken" on the application is not a denial. For
example, do not complete this column if the application was withdrawn
or the file was closed for incompleteness.
Code 1--Debt-to-income ratio
Code 2--Employment history
Code 3--Credit history
Code 4--Collateral
Code 5--Insufficient cash (downpayment, closing costs)
Code 6--Unverifiable information
Code 7--Credit application incomplete
Code 8--Mortgage insurance denied
Code 9--Other
2. If your institution uses the model form for adverse action
contained in the Appendix to Regulation B (Form C--1 in Appendix C,
Sample Notification Form), use the foregoing codes as follows:
a. Code 1 for: Income insufficient for amount of credit requested,
and Excessive obligations in relation to income.
b. Code 2 for: Temporary or irregular employment, and Length of
employment.
c. Code 3 for: Insufficient number of credit references provided;
Unacceptable type of credit references provided; No credit file;
Limited credit experience; Poor credit performance with us; Delinquent
past or present credit obligations with others; Garnishment,
attachment, foreclosure, repossession, collection action, or judgment;
and Bankruptcy.
d. Code 4 for: Value or type of collateral not sufficient.
e. Code 6 for: Unable to verify credit references; Unable to verify
employment; Unable to verify income; and Unable to verify residence.
f. Code 7 for: Credit application incomplete.
g. Code 9 for: Length of residence; Temporary residence; and Other
reasons specified on notice.
G. Pricing-Related Data
1. Rate Spread
{{10-31-08 p.7282}}
a. For a home-purchase loan, a refinancing, or a dwelling-secured
home improvement loan that you originated, report the spread between
the annual percentage rate (APR) and the average prime offer rate for a
comparable transaction if the spread is equal to or greater than 1.5
percentage points for first-lien loans or 3.5 percentage points for
subordinate-lien loans. To determine whether the rate spread meets this
threshold, use the average prime offer rate in effect for the type of
transaction as of the date the interest rate was set, and use the APR
for the loan, as calculated and disclosed to the consumer under
§ 226.6 or 226.18, as applicable, of Regulation Z (12 CFR part 226).
Current and historic average prime offer rates are set forth in the
tables published on the FFIEC's Web site
(http://www.ffiec.gov/hmda)
entitled "Average Prime Offer Rates--Fixed" and "Average Prime
Offer Rates--Adjustable." Use the most recently available average
prime offer rate. "Most recently available" means the average
prime offer rate set forth in the applicable table with the most recent
effective date as of the date the interest rate was set. Do not use an
average prime offer rate before its effective date.
b. If the loan is not subject to Regulation Z, or is a home
improvement loan that is not dwelling-secured, or is a loan that you
purchased, enter "NA."
c. Enter "NA" in the case of an application that does not
result in a loan origination.
d. Enter the rate spread to two decimal places, and use a leading
zero. For example, enter 03.29. If the difference between the APR and
the average prime offer rate is a figure with more than two decimal
places, round the figure or truncate the digits beyond two decimal
places.
e. If the difference between the APR and the average prime offer
rate is less than 1.5 percentage points for a first-lien loan and less
than 3.5 percentage points for a subordinate-lien loan, enter
"NA."
2. Date the interest was set. The relevant date to use
to determine the average prime offer rate for a comparable transaction
is the date on which the loan's interest rate was set by the financial
institution for the final time before closing. If an interest rate is
set pursuant to a "lock-in" agreement between the lender and the
borrower, then the date on which the agreement fixes the interest rate
is the date the rate was set. If a rate is re-set after a lock-in
agreement is executed (for example, because the borrower exercises a
float-down option or the agreement expires), then the relevant date is
the date the rate is re-set for the final time before closing. If no
lock-in agreement is executed, then the relevant date is the date on
which the institution sets the rate for the final time before closing.
3. HOEPA Status
a. For a loan that you originated or purchased that is subject to
the Home Ownership and Equity Protection Act of 1994 (HOEPA), as
implemented in Regulation Z (12 CFR 226.32), because the APR or the
points and fees on the loan exceed the HOEPA triggers, enter Code 1.
b. Enter code 2 in all other cases. For example, enter code 2 for a
loan that you originated or purchased that is not subject to the
requirements of HOEPA for any reason; also enter code 2 in the case of
an application that does not result in a loan origination.
H. Lien Status.
Use the following codes for loans that you originate and for
applications that do not result in an origination:
Code 1--Secured by a first lien.
Code 2--Secured by a subordinate lien.
Code 3--Not secured by a lien.
Code 4--Not applicable (purchased loan).
a. Use Codes 1 through 3 for loans that you originate, as well as
for applications that do not result in an orgination (applications that
are approved but not accepted, denied, withdrawn, or closed for
incompleteness).
b. Use Code 4 for loans that you purchase.
II. Federal Supervisory Agencies
A. You are strongly encouraged to submit your loan/application
register via Internet e-mail. If you elect to use this method of
transmission and your institution is regulated by the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation,
the National Credit Union Administration, or the Office of Thrift
Supervision, then you
{{4-30-03 p.7283}}should submit your
institution's files to the Internet e-mail address dedicated to that
purpose by the Federal Reserve Board; which can be found on the Web
site of the FFIEC. If your institution is regulated by one of the
foregoing agencies and you elect to submit your data by regular mail,
then use the following address: HMDA, Federal Reserve Board, Attention:
HMDA Processing, (insert name of your institution's regulatory
agency), 20th & Constitution Ave., NW., MS N502, Washington, DC
20551--0001.
B. If your institution is regulated by the Federal Reserve System,
you should use the Internet e-mail or regular mail address of your
district bank indicated on the Web site of the FFIEC. If your
institution is regulated by the Department of Housing and Urban
Development, then you should use the Internet e-mail or regular mail
address indicated on the Web site of the FFIEC.
{{4-30-03 p.7284}} _______
{{12-31-03 p.7285}}
_______
{{12-31-03 p.7286}}
LOAN/APPLICATION REGISTER CODE SHEET
Use the following codes to complete the Loan/Application Register.
The instructions to the HMDA-LAR explain the proper use of each code.
Application or Loan Information
Loan Type:
1--Conventional (any loan other than FHA, VA, FSA, or RHS loans)
2-- FHA-insured (Federal Housing Administration)
3--VA-guaranteed (Veterans Administration)
4--FSA/RHS (Farm Service Agency or Rural Housing Service)
Property Type:
1--One to four-family (other than manufactured housing)
2--Manufactured housing
3--Multifamily
Purpose of Loan:
1--Home purchase
2--Home improvement
3--Refinancing
Owner-Occupancy:
1--Owner-occupied as a principal dwelling
2--Not owner-occupied
3--Not applicable
Preapproval (home purchase loan only):
1--Preapproval was requested
2--Preapproval was not requested
3--Not applicable
Action Taken:
1--Loan originated
2--Application approved but not accepted
3--Application denied by financial institution
4--Application withdrawn by applicant
5--File closed for incompleteness
6--Loan purchased by financial institution
7--Preapproval request denied by financial institution
8--Preapproval request approved but not accepted (optional
reporting)
Applicant Information
Ethnicity:
1--Hispanic or Latino
2--Not Hispanic or Latino
3--Information not provided by applicant in mail, internet, or
telephone application
4--Not applicable (see App. A, I.D.)
5--No co-applicant
Race:
1--American Indian or Alaska Native
2--Asian
3--Black or African American
4--Native Hawaiian or Other Pacific Islander
5--White
6--Information not provided by applicant in mail, internet, or
telephone application
7--Not applicable (see App. A, I.D.)
8--No co-applicant
Sex:
1--Male
2--Female
3--Information not provided by applicant in mail, internet, or
telephone application
4--Not applicable (see App. A, I.D.)
5--No co-applicant
Type of Purchaser
0--Loan was not originated or was not sold in calendar year
covered by register
1--Fannie Mae
2--Ginnie Mae
3--Freddie Mac
4--Farmer Mac
5--Private securitization
6--Commercial bank, savings bank or savings association
7--Life insurance company, credit union, mortgage bank, or
finance company
8--Affiliate institution
9--Other type of purchaser
Reasons for Denial (optional reporting)
1--Debt-to-income ratio
2--Employment history
3--Credit history
4--Collateral
5--Insufficient cash (downpayment, closing costs)
6--Unverifiable information
7--Credit application incomplete
8--Mortgage insurance denied
9--Other
Other Data
HOEPA Status (only for loans originated or purchased):
1--HOEPA loan
2--Not a HOEPA loan
{{10-31-08 p.7286.01}}
Lien Status (only for applications and originations)
1--Secured by a first lien
2--Secured by a subordinate lien
3--Not secured by a lien
4--Not applicable (purchased loans)
[Codified to 12 C.F.R. Part 203, Appendix A]
[Appendix A amended at 67 Fed. Reg. 43223, June 27, 2002,
effective January 1, 2004; 68 Fed. Reg. 74831, December 29, 2003,
effective January 1, 2004; 73 Fed. Reg. 63336, October 24, 2008,
effective October 1, 2009, compliance mandatory for loan applications
taken on and after that date and for loans that close on and after
January 1, 2010 (regardless of their application
dates)]
Appendix B to Part 203Form and Instructions for Data
Collection on Ethnicity, Race, and Sex
I. Instructions on Collection of Data on Ethnicity,
Race, and Sex
You may list questions regarding the ethnicity, race, and sex of the
applicant on your loan application form, or on a separate form that
refers to the application. (See the sample form below for model
language.)
II. Procedures
A. You must ask the applicant for this information (but you cannot
require the applicant to provide it) whether the application is taken
in person, by mail or telephone, or on the Internet. For applications
taken by telephone, the information in the collection form must be
stated orally by the lender, except for that information which pertains
uniquely to applications taken in writing.
B. Inform the applicant that the federal government requests this
information in order to monitor compliance with federal statutes that
prohibit lenders from discriminating against applicants on these bases.
Inform the applicant that if the information is not provided where the
application is taken in person, you are required to note the data on
the basis of visual observation or surname.
C. You must offer the applicant the option of selecting one or more
racial designations.
D. If the applicant chooses not to provide the information for an
application taken in person, note this fact on the form and then note
the applicant's ethnicity, race, and sex on the basis of visual
observation and surname, to the extent possible.
E. If the applicant declines to answer these questions or fails to
provide the information on an application taken by mail or telephone or
on the Internet, the data need not be provided. In such a case,
indicate that the application was received by mail, telephone, or
Internet, if it is not otherwise evident on the face of the
application.
SAMPLE DATA-COLLECTION FORM INFORMATION FOR GOVERNMENT
MONITORING PURPOSES
The following information is requested by the federal
government for certain types of loans related to a dwelling in order to
monitor the lender's compliance with equal credit opportunity, fair
housing, and home mortgage disclosure laws. You are not required to
furnish this information, but are encouraged to do so. You may select
one or more designations for "Race." The law provides that a
lender may not discriminate on the basis of this information, or on
whether you choose to furnish it. However, if you choose not to furnish
the information and you have made this application in person, under
federal regulations the lender is required to note ethnicity, race, and
sex on the basis of visual observation or surname. If you do not wish
to furnish the information, please check below.
APPLICANT:
I do not wish to furnish this information
Ethnicity:
Hispanic or Latino
Not Hispanic or Latino
Race:
American Indian or Alaska Native
Asian
Black or African American
Native Hawaiian or Other Pacific Islander
White
Sex:
Female
Male
{{10-31-08 p.7286.02}}
CO-APPLICANT:
I do not wish to furnish this information.
Ethnicity:
Hispanic or Latino
Not Hispanic or Latino
Race:
American Indian or Alaska Native
Asian
Black or African American
Native Hawaiian or Other Pacific Islander
White
Sex:
Female
Male
[Codified to 12 C.F.R. Part 203, Appendix B]
[Appendix B amended at 67 Fed. Reg. 43227, June 27, 2002,
effective January 1, 2004]
{{12-31-03 p.7287}}
SUPPLEMENT I TO PART 203STAFF COMMENTARY
Introduction
1. Status. The commentary in this supplement is the
vehicle by which the Division of Consumer and Community Affairs of the
Federal Reserve Board issues formal staff interpretations of Regulation
C (12 CFR part 203).
Section
203.1--Authority, Purpose, and Scope
1(c) Scope. 1. General. The comments in
this section address issues affecting coverage of institutions and
exemptions from coverage.
2. The broker rule and the meaning of "broker"
and "investor." For the purposes of the guidance
given in this commentary, an institution that takes and processes a
loan application and arranges for another institution to acquire the
loan at or after closing is acting as a "broker," and an
institution that acquires a loan from a broker at or after closing is
acting as an "investor." (The terms used in this commentary may
have different meanings in certain parts of the mortgage lending
industry, and other terms may be used in place of these terms, for
example in the Federal Housing Administration mortgage insurance
programs.) Depending on the facts, a broker may or may not make a
credit decision on an application (and thus it may or may not have
reporting responsibilities). If the broker makes a credit decision, it
reports that decision; if it does not make a credit decision, it does
not report. If an investor reviews an application and makes a credit
decision prior to closing, the investor reports that decision. If the
investor does not review the application prior to closing, it reports
only the loans it does not purchase. An institution that makes a credit
decision on an application prior to closing reports that decision
regardless of whose name the loan closes in.
3. Illustrations of the broker rule. Assume that,
prior to closing, four investors receive the same application from a
broker; two deny it, one approves it, and one approves it and acquires
the loan. In these circumstances, the first two report denials, the
third reports the transaction as approved but not accepted, and the
fourth reports an origination (whether the loan closes in the name of
the broker or the investor). Alternatively, assume that the broker
denies a loan before sending it to an investor; in this situation, the
broker reports a denial.
4. Broker's use of investor's underwriting criteria.
If a broker makes a credit decision based on underwriting criteria
set by an investor, but without the investor's review prior to
closing, the broker has made the credit decision. The broker reports as
an origination a loan that it approves and closes, and reports as a
denial an application that it turns down (either because the
application does not meet the investor's underwriting guidelines or
for some other reason). The investor reports as purchases only those
loans it purchases.
5. Insurance and other criteria. If an institution
evaluates an application based on the criteria or actions of a third
party other than an investor (such as a government or private insurer
or guarantor), the institution must report the action taken on the
application (loan originated, approved but not accepted, or denied, for
example).
6. Credit decision of agent is decision of prinicpal.
If an institution approves loans through the actions of an agent,
the institution must report the action taken on the application (loan
originated, approved but not accepted, or denied, for example). State
law determines whether one party is the agent of another.
7. Affiliate bank underwriting (250.250 review). If an
institution makes an independent evaluation of the creditworthiness of
an applicant (for example, as part of a preclosing review by an
affiliate bank under 12 CFR 250.250, which interprets section 23A of
the Federal Reserve Act), the institution is making a credit decision.
If the institution then acquires the loan, it reports the loan as an
origination whether the loan closes in the name of the institution or
its affiliate. An institution that does not acquire the loan but takes
some other action reports that action.
8. Participation loan. An institution that originates
a loan and then sells partial interests to other institutions reports
the loan as an origination. An institution that acquires
{{12-31-03 p.7288}}only a partial
interest in such a loan does not report the transaction even if it has
participated in the underwriting and origination of the loan.
9. Assumptions. An assumption occurs when an
institution enters into a written agreement accepting a new borrower as
the obligor on an existing obligation. An institution reports as a home
purchase loan an assumption (or an application for an assumption) in
the amount of the outstanding principal. If a transaction does not
involve a written agreement between a new borrower and the institution,
it is not an assumption for HMDA purposes and is not reported.
Section
203.2--Definitions
2(b) Application. 1. Consistency with Regulation
B. Board interpretations that appear in the official staff
commentary to Regulation B (Equal Credit Opportunity,
12 CFR part 202,
Supplement 1) are generally applicable to the definition of an
application under Regulation C. However, under Regulation C the
definition of an application does not include prequalification
requests.
2. Prequalification. A prequalification request is a
request by a prospective loan applicant (other than a request for
preapproval) for a preliminary determination on whether the prospective
applicant would likely qualify for credit under an institution's
standards, or for a determination on the amount of credit for which the
prospective applicant would likely qualify. Some institutions evaluate
prequalification requests through a procedure that is separate from the
institution's normal loan application process; others use the same
process. In either case, Regulation C does not require an institution
to report prequalification requests on the HMDA/LAR, even though these
requests may constitute applications under Regulation B for purposes of
adverse action notices.
3. Requests for preapproval. To be a covered preapproval
program, the written commitment issued under the program must result
from a full review of the creditworthiness of the applicant, including
such verification of income, resources and other matters as is
typically done by the institution as part of its normal credit
evaluation program. In addition to conditions involving the
identification of a suitable property and verification that no material
change has occurred in the applicant's financial condition or
creditworthiness, the written commitment may be subject only to other
conditions (unrelated to the financial condition or creditworthiness of
the applicant) that the lender ordinarily attaches to a traditional
home mortgage application approval. These conditions are limited to
conditions such as requiring an acceptable title insurance binder or a
certificate indicating clear termite inspection, and, in the case where
the applicant plans to use the proceeds from the sale of the
applicant's present home to purchase a new home, a settlement
statement showing adequate proceeds from the sale of the present home.
2(c) Branch office. 1. Credit union. For
purposes of Regulation C, a "branch" of a credit union is any
office where member accounts are established or loans are made, whether
or not the office has been approved as a branch by a federal or state
agency. (See 12 U.S.C. 1752).
2. Depository institution. A branch of a depository
institution does not include a loan production office, the office of an
affiliate, or the office of a third party such as a loan broker. (But
see Appendix A, Paragraph I.C.6, which requires certain depository
institutions to report property location even for properties located
outside those MSAs or Metropolitan Divisions in which the institution
has a home or branch office.)
3. Nondepository institution. For a nondepository
institution, "branch office" does not include the office of an
affiliate or other third party such as a loan broker. (But note that
certain nondepository institutions must report property location even
in MSAs or Metropolitan Divisions where they do not have a physical
location.)
2(d) Dwelling. 1. Coverage. The definition of
"dwelling" is not limited to the principal or other residence of
the applicant or borrower, and thus includes vacation or second homes
and rental properties. A dwelling also includes a multifamily structure
such as an apartment building.
{{12-31-07 p.7289}}
2. Exclusions. Recreational vehicles such as boats or
campers are not dwellings for purposes of HMDA. Also excluded are
transitory residences such as hotels, hospitals, and college
dormitories--whose occupants have principal residences elsewhere.
2(e) Financial institution. 1. General. An
institution that met the test for coverage under HMDA in year 1, and
then ceases to meet the test (for example, because its assets fall
below the threshold on December 31 of year 2) stops collecting HMDA
data beginning with year 3. Similarly, an institution that did not meet
the coverage test for a given year, and then meets the test in the
succeeding year, begins collecting HMDA data in the calendar year
following the year in which it meets the test for coverage. For
example, a for-profit mortgage lending institution (other than a bank,
savings association, or credit union) that, in year 1, falls below the
thresholds specified in § 203.2(e)(2)(ii)(A) and (B), but meets one
of them in year 2, need not collect data in year 2, but begins
collecting data in year 3.
2. Adjustment of exemption threshold for depository
institutions. For data collection in 2008, the asset-size
exemption threshold is $37 million. Depository institutions with assets
at or below $37 million as of December 31, 2007 are exempt from
collecting data for 2008.
3. Coverage after a merger. Several scenarios of
data-collection responsibilities for the calendar year of a merger are
described below. Under all the scenarios, if the merger results in a
covered institution, that institution must begin data collection
January 1 of the following calendar year.
i. Two institutions are not covered by Regulation C because of
asset size. The institutions merge. No data collection is required for
the year of the merger (even if the merger results in a covered
institution).
ii. A covered institution and an exempt institution merge. The
covered institution is the surviving institution. For the year of the
merger, data collection is required for the covered institution's
transactions. Data collection is optional for transactions handled in
offices of the previously exempt institution.
iii. A covered institution and an exempt institution merge. The
exempt institution is the surviving institution, or a new institution
is formed. Data collection is required for transactions of the covered
institution that take place prior to the merger. Data collection is
optional for transactions taking place after the merger date.
iv. Two covered institutions merge. Data collection is required
for the entire year. The surviving or resulting institution files
either a consolidated submission or separate submissions for that year.
4. Originations. HMDA coverage depends in part on
whether an institution has originated home purchase loans. To determine
whether activities with respect to a particular loan constitute an
origination, institutions should consult, among other parts of the
staff commentary, the discussion of the broker rule under
§§ 203.1(c) and 203.4(a).
5. Branches of foreign banks--treated as
banks. A federal branch or a state-licensed insured branch of a
foreign bank is a "bank" under section 3(a)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(a)), and is covered by HMDA if it
meets the tests for a depository institution found in § 203.2(e)(1)
of Regulation C.
6. Branches and offices of foreign
banks--treated as for-profit mortgage lending institutions.
Federal agencies, state-licensed agencies, state-licensed
uninsured branches of foreign banks, commercial lending companies owned
or controlled by foreign banks, and entities operating under section 25
or 25A of the Federal Reserve Act, 12 U.S.C. 601 and 611 (Edge Act and
agreement corporations) are not "banks" under the Federal Deposit
Insurance Act. These entities are nonetheless covered by HMDA if they
meet the tests for a for-profit nondepository mortgage lending
institution found in § 203.2(e)(2) of Regulation C.
2(g) Home improvement loan. 1. Classification
requirement for loans not secured by a lien on a dwelling. An
institution has "classified" a loan that is not secured by a lien
on a dwelling as a home improvement loan if it has entered the loan on
its books as a home improvement loan, or has otherwise coded or
identified the loan as a home improvement loan. For example, an
institution that has booked a loan or reported it on a "call
report" as a home improvement loan has classified it as a home
improvement loan. An institution may also classify loans as home
improvement loans in other ways (for example, by color-coding loan
files).
{{12-31-07 p.7290}}
2. Improvements to real property. Home improvements
include improvements both to a dwelling and to the real property on
which the dwelling is located (for example, installation of a swimming
pool, construction of a garage, or landscaping).
3. Commercial and other loans. A home improvement loan
may include a loan originated outside an institution's residential
mortgage lending division (such as a loan to improve an apartment
building made through the commercial loan department).
4. Mixed-use property. A loan to improve property used
for residential and commercial purposes (for example, a building
containing apartment units and retail space) is a home improvement loan
if the loan proceeds are used primarily to improve the residential
portion of the property. If the loan proceeds are used to improve the
entire property (for example, to replace the heating system), the loan
is a home improvement loan if the property itself is primarily
residential. An institution may use any reasonable standard to
determine the primary use of the property, such as by square footage or
by the income generated. An institution may select the standard to
apply on a case-by-case basis. If the loan is unsecured, to report the
loan as a home improvement loan the institution must also have
classified it as such.
5. Multiple-category loans. If a loan is a home
improvement loan as well as a refinancing, an institution reports the
loan as a home improvement loan.
2(h) Home purchase loan. 1. Multiple properties.
A home purchase loan includes a loan secured by one dwelling and
used to purchase another dwelling.
2. Mixed-use property. A dwelling-secured loan to
purchase property used primarily for residential purposes (for example,
an apartment building containing a convenience store) is a home
purchase loan. An institution may use any reasonable standard to
determine the primary use of the property, such as by square footage or
by the income generated. An institution may select the standard to
apply on a case-by-case basis.
3. Farm loan. A loan to purchase property used
primarily for agricultural purposes is not a home purchase loan even if
the property includes a dwelling. An institution may use any reasonable
standard to determine the primary use of the property, such as by
reference to the exemption from Regulation X (Real Estate Settlement
Procedures, 24 CFR 3500.5(b)(1)) for a loan on property of 25 acres or
more. An institution may select the standard to apply on a case-by-case
basis.
4. Commercial and other loans. A home purchase loan
may include a loan originated outside an institution's residential
mortgage lending division (such as a loan for the purchase of an
apartment building made through the commercial loan department).
5. Construction and permanent financing. A home
purchase loan includes both a combined construction/permanent loan and
the permanent financing that replaces a construction-only loan. It does
not include a construction-only loan, which is considered "temporary
financing" under Regulation C and is not reported.
6. Second mortgages that finance the downpayments on first
mortgages. If an institution making a first mortgage loan to a
home purchaser also makes a second mortgage loan to the same purchaser
to finance part or all the home purchaser's downpayment, the
institution reports each loan separately as a home purchase loan.
7. Multiple-category loans. If a loan is a home
purchase loan as well as a home improvement loan, or a refinancing, an
institution reports the loan as a home purchase loan.
2(i) Manufactured home.
1. Definition of a manufactured home. The definition
in §203.2(i) refers to the federal building code for factory-built
housing established by the Department of Housing and Urban Development
(HUD). The HUD code requires generally that housing be essentially
ready for occupancy upon leaving the factory and being transported to a
building site. Modular homes that meet all of the HUD code standards
are included in the definition because they are ready for occupancy
upon leaving the factory. Other factory-built homes, such as panelized
and pre-cut homes, generally do not meet the HUD code because they
require a significant amount of construction on site before they are
ready for occupancy.
{{12-31-03 p.7291}}Loans
and applications relating to manufactured homes that do not meet the
HUD code should not be identified as manufactured housing under HMDA.
2(j) Metropolitan Statistical Areas and Metropolitan
Divisions
1. Use of terms "Metropolitan Statistical
Area" and "Metropolitan Division." The U.S.
Office of Management and Budget defines Metropolitan Statistical Areas
and Metropolitan Divisions to provide nationally consistent definitions
for collecting, tabulating, and publishing Federal statistics for a set
of geographic areas. OMB divides every Metropolitan Statistical Area
(MSA) with a population of 2.5 million or more into Metropolitan
Divisions (MDs); MSAs with populations under 2.5 million population are
not so divided. 67 FR 82228 (December 27, 2000). For all purposes under
Regulation C, if an MSA is divided by OMB into MDs, the appropriate
geographic unit to be used is the MD; if an MSA is not so divided by
OMB into MDs, the appropriate geographic unit to be used is the MSA.
Section
203.4--Compilation of Loan Data
4(a) Data Format and Itemization. 1. Reporting
requirements.
i. An institution reports data on loans that it originated and
loans that it purchased during the calendar year described in the
report. An institution reports these data even if the loans were
subsequently sold by the institution.
ii. An institution reports the data for loan applications that
did not result in originations--for example, applications that the
institution denied or that the applicant withdrew during the calendar
year covered by the report.
iii. In the case of brokered loan applications or applications
forwarded through a correspondent, the institution reports as
originations the loans that it approved and subsequently acquired per a
pre-closing arrangement (whether or not they closed in the
institution's name). Additionally, the institution reports the data
for all applications that did not result in originations--for example,
applications that the institution denied or that the applicant withdrew
during the calendar year covered by the report (whether or not they
would have closed in the institution's name). For all of these loans
and applications, the institution reports the required data regarding
the borrower's or applicant's ethnicity, race, sex, and income.
iv. Loan originations are to be reported only once. If the
institution is the loan broker or correspondent, it does not report as
originations the loans that it forwarded to another lender for approval
prior to closing, and that were approved and subsequently acquired by
that lender (whether or not they closed in the institution's name).
v. An institution reports applications that were received in the
previous calendar year but were acted upon during the calendar year
covered by the current register.
vi. A financial institution submits all required data to its
supervisory agency in one package, with the prescribed transmittal
sheet. An officer of the institution certifies to the accuracy of the
data.
vii. The transmittal sheet states the total number of line
entries contained in the accompanying data transmission.
2. Updating--agency requirements. Certain state or
federal regulations, such as the Federal Deposit Insurance
Corporation's regulations, may require an institution to update its
data more frequently than is required under Regulation C.
3. Form of quarterly updating. An institution may
maintain the quarterly updates of the HMDA/LAR in electronic or any
other format, provided the institution can make the information
available to its regulatory agency in a timely manner upon request.
4. Transition rules for applications received before
January 1, 2004, when final action is taken on or after January 1,
2004. For applications received before January 1, 2004, on which
final action is taken on or after January 1, 2004, data must be
collected and reported on the HMDA/LAR under the revisions to
Regulation C that take effect on January 1, 2004, subject to the
exceptions for property type, loan purpose, requests for preapproval,
applicant information, and rate spread set forth in this comment.
i. Property type. Lenders need not determine whether
an application received before January 1, 2004, involves a manufactured
home, and may report the property type as 1- to 4-family.
ii. Loan purpose. For applications received before
January 1, 2004, lenders may use the definitions of a home improvement
loan and a refinancing that were in effect in
{{12-31-03 p.7292}}2003. For
example, a lender need not report data on an application received
before January 1, 2004, for a dwelling-secured loan made for the
purpose of home improvement, if the lender did not classify the loan as
a home improvement loan. Similarly, a lender may report data on an
application for a refinancing received in 2003, where the new
obligation will be, but the existing obligation was not, secured by a
lien on a dwelling.
iii. Requests for preapproval. For requests received
before January 1, 2004, lenders need not report requests for
preapproval (as that term is defined in § 203.2(b)(2) of the revised
Regulation C) that do not result in a traditional loan application.
Lenders may, at their option, report requests for preapproval that are
denied or that are approved but not accepted. In addition, lenders need
not specify whether an application for a home purchase loan involved a
request for preapproval, and should use code 3 (Not Applicable) in the
preapproval field on the HMDA/LAR.
iv. Applicant information. For applications received
before January 1, 2004, lenders must collect data on race or national
origin using the categories in effect in 2003, and must convert the
data to the codes in effect in 2004 for reporting, using the following
conversion guide:
(A) Ethnicity. The revised Regulation C requires lenders to
request an applicant's ethnicity first (Hispanic or Latino, Not
Hispanic or Latino), and then to request the applicant's race. The
HMDA/LAR has been revised accordingly, so that ethnicity and race are
distinct fields.
(1) If the applicant's race was identified as
Hispanic (code 4) in 2003, use code 1 (Hispanic or Latino) for
reporting ethnicity.
(2) If the applicant's race was identified as
American Indian or Alaskan Native, Asian or Pacific Islander, Black,
White, Other, or Not Applicable (codes 1, 2, 3, 5, 6, or 8) in 2003,
use code 4 (Not Applicable) for reporting ethnicity.
(3) If the applicant did not provide information on
race in a mail, Internet, or telephone application (code 7) in 2003,
use code 3 (information not provided by applicant in mail, Internet, or
telephone application) for reporting ethnicity.
(B) Race.
(1) If the applicant's race was identified as
American Indian or Alaskan Native, Black, or White in 2003, use the
corresponding code for 2004. For example, if the applicant's race was
identified as Black (code 3) in 2003, use code 3 (Black or
African-American) for reporting race in 2004.
(2) If the applicant's race was identified as Asian
or Pacific Islander in 2003, use code 2 (Asian).
(3) If the applicant's race was identified as
Hispanic in 2003, use code 7 (Not Applicable).
(4) If the applicant's race was identified as Other
in 2003, use code 7 (Not Applicable).
(5) If the applicant did not provide information on
race in a mail, Internet, or telephone application (code 7) in 2003,
use code 6 (Information not provided by applicant in mail, Internet, or
telephone application).
(6) If the applicant's race was identified as Not
Applicable (code 8) in 2003, use code 7 (Not Applicable).
(C) Sex. For applications received before January 1, 2004, in
which there is no co-applicant, the lender may use code 4 (Not
Applicable) in the field provided for the co-applicant's sex.
v. Rate Spread. For applications received before
January 1, 2004, in which the rate lock occurred before January 1,
2004, lenders may report NA (Not Applicable) for rate spread. For
applications received before January 1, 2004, for which the rate lock
occurred after January 1, 2004, lenders must calculate and report the
rate spread in accordance with the rules set forth in new section
202.4(a)(12) (see 67 FR 7222 (Feb. 15, 2002); 67 FR 43223
(June 27, 2002)).
(A) Example: Assume an application is received on December 1,
2003; the rate lock occurs on December 26, 2003, and the loan is
originated on January 15, 2004. The lender may report NA (Not
Applicable) for rate spread.
(B) Example: Assume an application is received on December 15,
2003; the rate lock occurs on January 3, 2004, and the loan is
originated on January 15, 2004. The lender must calculate and report
the rate spread in accordance with the rules in new
section
{{12-31-03 p.7293}}202.4(a)(12)
(see 67 FR 7222 (Feb. 15, 2002); 67 FR 43223 (June 27,
2002)).
4(a)(1) Application number and application date. 1.
Application date--consistency. In reporting the
date of application, an institution reports the date the application
was received or the date shown on the application. Although an
institution need not choose the same approach for its entire HMDA
submission, it should be generally consistent (such as by routinely
using one approach within a particular division of the institution or
for a category of loans).
2. Application date--application forwarded by a
broker. For an application forwarded by a broker, an institution
reports the date the application was received by the broker, the date
the application was received by the institution, or the date shown on
the application. Although an institution need not choose the same
approach for its entire HMDA submission, it should be generally
consistent (such as by routinely using one approach within a particular
division of the institution or for a category of loans).
3. Application date--reinstated application. If,
within the same calendar year, an applicant asks an institution to
reinstate a counteroffer that the applicant previously did not accept
(or asks the institution to reconsider an application that was denied,
withdrawn, or closed for incompleteness), the institution may treat
that request as the continuation of the earlier transaction or as a new
transaction. If the institution treats the request for reinstatement or
reconsideration as a new transaction, it reports the date of the
request as the application date.
4. Application or loan number. An institution must
ensure that each identifying number is unique within the institution.
If an institution's register contains data for branch offices, for
example, the institution could use a letter or a numerical code to
identify the loans or applications of different branches, or could
assign a certain series of numbers to particular branches to avoid
duplicate numbers. Institutions are strongly encouraged not to use the
applicant's or borrower's name or social security number, for privacy
reasons.
5. Application--year action taken. An institution must
report an application in the calendar year in which the institution
takes final action on the application.
Paragraph 4(a)(3) Purpose.
1. Purpose--statement of applicant. An institution may
rely on the oral or written statement of an applicant regarding the
proposed use of loan proceeds. For example, a lender could use a
check-box, or a purpose line, on a loan application to determine
whether or not the applicant intends to use loan proceeds for home
improvement purposes.
2. Purpose--multiple-purpose loan. If a loan is a home
purchase loan as well as a home improvement loan, or a refinancing, an
institution reports the loan as a home purchase loan. If a loan is a
home improvement loan as well as a refinancing, an institution reports
the loan as a home improvement loan.
Paragraph 4(a)(6) Occupancy.
1. Occupancy--multiple properties. If a loan relates
to multiple properties, the institution reports the owner occupancy
status of the property for which property location is being reported.
(See the comments to paragraph 4(a)(9), Property location.)
Paragraph 4(a)(7) Loan amount.
1. Loan amount--counteroffer. If an applicant accepts
a counteroffer for an amount different from the amount initially
requested, the institution reports the loan amount granted. If an
applicant does not accept a counteroffer or fails to respond, the
institution reports the loan amount initially requested.
2. Loan amount--multiple-purpose loan. Except in the
case of a home-equity line of credit, an institution reports the entire
amount of the loan, even if only a part of the proceeds is intended for
home purchase or home improvement.
3. Loan amount--home-equity line. An institution that
has chosen to report home-equity lines of credit reports only the part
that is intended for home-improvement or home-purchase purposes.
4. Loan amount--assumption. An institution that enters
into a written agreement accepting a new party as the obligor on a loan
reports the amount of the outstanding principal on the assumption as
the loan amount.
Paragraph 4(a)(8) Type of action taken and date.
1. Action taken--counteroffers. If an institution
makes a counteroffer to lend on terms different from the applicant's
initial request (for example, for a shorter loan maturity or in a
different amount) and the applicant does not accept the counteroffer or
fails to respond, the
{{12-31-03 p.7294}}institution
reports the action taken as a denial on the original terms requested by
the applicant.
2. Action taken--rescinded transactions. If a borrower
rescinds a transaction after closing, the institution may report the
transaction either as an origination or as an application that was
approved but not accepted.
3. Action taken--purchased loans. An institution
reports the loans that it purchased during the calendar year, and does
not report the loans that it declined to purchase.
4. Action taken--conditional approvals. If an
institution issues a loan approval subject to the applicant's meeting
underwriting conditions (other than customary loan commitment or
loan-closing conditions, such as a clear-title requirement or an
acceptable property survey) and the applicant does not meet them, the
institution reports the action taken as a denial.
5. Action taken date--approved but not accepted. For a
loan approved by an institution but not accepted by the applicant, the
institution reports any reasonable date, such as the approval date, the
deadline for accepting the offer, or the date the file was closed.
Although an institution need not choose the same approach for its
entire HMDA submission, it should be generally consistent (such as by
routinely using one approach within a particular division of the
institution or for a category of loans).
6. Action taken date--originations. For loan
originations, an institution generally reports the settlement or
closing date. For loan originations that an institution acquires
through a broker, the institution reports either the settlement or
closing date, or the date the institution acquired the loan from the
broker. If the disbursement of funds takes place on a date later than
the settlement or closing date, the institution may use the date of
disbursement. For a construction/permanent loan, the institution
reports either the settlement or closing date, or the date the loan
converts to the permanent financing. Although an institution need not
choose the same approach for its entire HMDA submission, it should be
generally consistent (such as by routinely using one approach within a
particular division of the institution or for a category of loans).
Notwithstanding this flexibility regarding the use of the closing date
in connection with reporting the date action was taken, the year in
which an origination goes to closing is the year in which the
institution must report the origination.
7. Action taken--pending applications. An institution
does not report any loan application still pending at the end of the
calendar year; it reports that application on its register for the year
in which final action is taken.
Paragraph 4(a)(9) Property location.
1. Property location--multiple properties (home
improvement/refinance of home improvement). For a home improvement
loan, an institution reports the property being improved. If more than
one property is being improved, the institution reports the location of
one of the properties or reports the loan using multiple entries on its
HMDA/LAR (with unique identifiers) and allocating the loan amount among
the properties.
2. Property location--multiple properties (home
purchase/refinance of home purchase). for a home purchase loan, an
institution reports the property taken as security. If an institution
takes more than one property as security, the institution reports the
location of the property being purchased if there is just one. If the
loan is to purchase multiple properties and is secured by multiple
properties, the institution reports the location of one of the
properties or reports the loan using multiple entries on its HMDA/LAR
(with unique identifiers) and allocating the loan amount among the
properties.
3. Property location--loans purchased from another
institution. The requirement to report the property location by
census tract in an MSA or Metropolitan Division where the institution
has a home or branch office applies not only to loan applications and
originations but also to loans purchased from another institution. This
includes loans purchased from an institution that did not have a home
or branch office in that MSA or Metropolitan Division and did not
collect the property-location information.
4. Property location--mobile or manufactured home. If
information about the potential site of a mobile or manufactured home
is not available, an institution reports using the code for "not
applicable."
{{10-31-08 p.7295}}
Paragraph 4(a)(10) Applicant and income data
1. Applicant data--completion by applicant. An
institution reports the monitoring information as provided by the
applicant. For example, if an applicant checks the "Asian" box
the institution reports using the "Asian" code.
2. Applicant data--completion by lender. If an
applicant fails to provide the requested information for an application
taken in person, the institution reports the data on the basis of
visual observation or surname.
3. Applicant data--application completed in person.
When an applicant meets in person with a lender to complete an
application that was begun by mail, Internet, or telephone, the
institution must request the monitoring information. If the meeting
occurs after the application process is complete, for example, at
closing, the institution is not required to obtain monitoring
information.
4. Applicant data--joint applicant. A joint applicant
may enter the government monitoring information on behalf of an absent
joint applicant. If the information is not provided, the institution
reports using the code for "information not provided by applicant in
mail, Internet, or telephone application."
5. Applicant data--video and other electronic-application
processes. An institution that accepts applications through
electronic media with a video component treats the applications as
taken in person and collects the information about the ethnicity, race,
and sex of applicants. An institution that accepts applications through
electronic media without a video component (for example, the Internet
or facsimile) treats the applications as accepted by mail.
6. Income data--income relied on. An institution
reports the gross annual income relied on in evaluating the
creditworthiness of applicants. For example, if an institution relies
on an applicant's salary to compute a debt-to-income ratio but also
relies on the applicant's annual bonus to evaluate creditworthiness,
the institution reports the salary and the bonus to the extent relied
upon. Similarly, if an institution relies on the income of a cosigner
to evaluate creditworthiness, the institution includes this income to
the extent relied upon. But an institution does not include the income
of a guarantor who is only secondarily liable.
7. Income data--co-applicant. If two persons jointly
apply for a loan and both list income on the application, but the
institution relies only on the income of one applicant in computing
ratios and in evaluating creditworthiness, the institution reports only
the income relied on.
8. Income data--loan to employee. An institution may
report "NA" in the income field for loans to its employee to
protect their privacy, even though the institution relied on their
income in making its credit decisions.
Paragraph 4(a)(11) Purchaser.
1. Type of purchaser--loan-participation interests sold to
more than one entity. An institution that originates a loan, and
then sells it to more than one entity, reports the "type of
purchaser" based on the entity purchasing the greatest interest, if
any. If an institution retains a majority interest, it does not report
the sale.
2. Type of purchaser--swapped loans. Loans
"swapped" for mortgage-backed securities are to be treated as
sales; the purchaser is the type of entity receiving the loans that are
swapped.
Paragraph 4(a)(12) Rate spread information.
Paragraph 4(a)(12)(ii).
1. Average prime offer rate. Average prime offer rates
are annual percentage rates derived from average interest rates,
points, and other loan pricing terms offered to borrowers by a
representative sample of lenders for mortgage loans that have low-risk
pricing characteristics. Other pricing terms include commonly used
indices, margins, and initial fixed-rate periods for variable-rate
transactions. Relevant pricing characteristics include a consumer's
credit history and transaction characteristics such as the
loan-to-value ratio, owner-occupant status, and purpose of the
transaction. To obtain average prime offer rates, the Board uses a
survey of lenders that both meets the criteria of § 203.4(a)(12)(ii)
and provides pricing terms for at least two types of variable-rate
transactions and at least two types of non-variable-rate transactions.
An example of such a survey is the Freddie Mac Primary Mortgage Market
Survey®.
{{10-31-08 p.7296}}
2. Comparable transaction. The rate spread reporting
requirement applies to a reportable loan with an annual percentage rate
that exceeds by the specified margin (or more) the average prime offer
rate for a comparable transaction as of the date the interest rate is
set. The tables of average prime offer rates published by the Board
(see comment 4(a)(12)(ii)--3) indicate how to identify the
comparable transaction.
3. Board tables. The Board publishes on the FFIEC's
Web site
(http://www.ffiec.gov/hmda),
in table form, average prime offer rates for a wide variety of
transaction types. The Board calculates an annual percentage rate,
consistent with Regulation Z (see 12 CFR 226.22 and part
226, appendix J), for each transaction type for which pricing terms are
available from the survey described in comment 4(a)(12)(ii)--1. The
Board estimates annual percentage rates for other types of transactions
for which direct survey data are not available based on the loan
pricing terms available in the survey and other information. The Board
publishes on the FFIEC's Web site the methodology it uses to arrive at
these estimates.
Paragraph 4(a)(14) Lien status.
1. Determining lien status for applications and loans
originated. i. Lenders are required to report lien status for
loans they originate and applications that do not result in
originations. Lien status is determined by reference to the best
information readily available to the lender at the time final action is
taken and to the lender's own procedures. Thus, lenders may rely on
the title search they routinely perform as part of their underwriting
procedures--for example, for home purchase loans. Regulation C does not
require lenders to perform title searches solely to comply with HMDA
reporting requirements. Lenders may rely on other information that is
readily available to them at the time final action is taken and that
they reasonably believe is accurate, such as the applicant's statement
on the application or the applicant's credit report. For example,
where the applicant indicates on the application that there is a
mortgage on the property or where the applicant's credit report shows
that the applicant has a mortgage--and that mortgage is not going to be
paid off as part of the transaction--the lender may assume that the
loan it originates is secured by a subordinate lien. If the same
application did not result in an origination--for example, because the
application is denied or withdrawn--the lender would report the
application as an application for a subordinate-lien loan.
ii. Lenders may also consider their established procedures when
determining lien status for applications that do not result in
originations. For example, a consumer applies to a lender to refinance
a $100,000 first mortgage; the consumer also has a home equity line of
credit for $20,000. If the lender's practice in such a case is to
ensure that it will have first-lien position--through a subordination
agreement with the holder of the mortgage on the home equity line--then
the lender should report the application as an application for a
first-lien loan.
Paragraph 4(c)(3) Optional data--home-equity lines of
credit.
1. An institution that opts to report home-equity lines reports
the disposition of all applications, not just originations.
Paragraph 4(d) Excluded data.
1. Mergers, purchases in bulk, and branch acquisitions.
If a covered institution acquires loans in bulk from another
institution (for example, from the receiver for a failed institution)
but no merger or acquisition of the institution, or acquisition of a
branch, is involved, the institution reports the loans as purchased
loans.
Section
203.5(a)--Disclosure and Reporting
Paragraph 5(a) Reporting to agency.
1. Submission of data. Institutions submit data to
their supervisory agencies in an automated, machine-readable form. The
format must conform to that of the HMDA/LAR. An institution should
contact its federal supervisory agency for information regarding
procedures and technical specifications for automated data submission;
in some cases, agencies also make software available for automated data
submission. The data are edited before submission, using the edits
included in the agency-supplied software or equivalent edits in
software available from vendors or developed in-house.
2. Submission in paper form. Institutions that report
twenty-five or fewer entries on their HMDA/LAR may collect and report
the data in paper form. An institution that submits its register in
nonautomated form sends two copies that are typed or computer printed
and
{{10-31-08 p.7297}}must use the
format of the HMDA/LAR (but need not use the form itself). Each page
must be numbered along with the total number of pages (for example,
"Page 1 of 3").
3. Procedures for entering data. The required data are
entered in the register for each loan origination, each application
acted on, and each loan purchased during the calendar year. The
institution should decide on the procedure it wants to follow--for
example, whether to begin entering the required data, when an
application is received, or to wait until final action is taken (such
as when a loan goes to closing or an application is denied).
4. Options for collection. An institution may collect
data on separate registers at different branches, or on separate
registers for different loan types (such as for home purchase or home
improvement loans, or on loans on multifamily dwellings). Entries need
not be grouped on the register by MSA or Metropolitan Division, or
chronologically, or by census tract numbers, or in any other particular
order.
5. Change in supervisory agency. If the supervisory
agency for a covered institution changes (as a consequence of a merger
or a change in the institution's charter, for example), the
institution must report data to its new supervisory agency beginning
with the year of the change.
6. Subsidiaries. An institution is a subsidiary of a
bank or savings association (for purposes of reporting HMDA data to the
parent's supervisory agency) if the bank or savings association holds
or controls an ownership interest that is greater than 50 percent of
the institution.
7. Transmittal sheet--additional data submissions. If
an additional data submission becomes necessary (for example, because
the institution discovers that data were omitted from the initial
submission, or because revisions are called for, that submission must
be accompanied by a transmittal sheet.
8. Transmittal sheet--revisions or deletions. If a
data submission involves revisions or deletions of previously submitted
data, it must state the total of all line entries contained in that
submission, including both those representing revisions or deletions of
previously submitted entries, and those that are being resubmitted
unchanged or are being submitted for the first time. Depository
institutions must provide a list of the MSAs or Metropolitan Divisions
in which they have home or branch offices.
Paragraph 5(b) Public disclosure of statement.
1. Business day. For purposes of § 203.5, a business
day is any calendar day other than a Saturday, Sunday, or legal public
holiday.
2. Format. An institution may make the disclosure
statement available in paper form or, if the person requesting the data
agrees, in automated form (such as by PC diskette or CD Rom).
Paragraph 5(c) Public disclosure of modified loan/application
register.
1. Format. An institution may make the modified
register available in paper or automated form (such as PC diskette or
computer tape). Although institutions are not required to make the
modified register available in census tract order, they are strongly
encouraged to do so in order to enhance its utility to users.
Paragraph 5(e) Notice of availability.
1. Poster--suggested text. An institution may use any
text that meets the requirements of the regulation. Some of the federal
financial regulatory agencies and HUD provide HMDA posters that an
institution can use to inform the public of the availability of its
HMDA data, or the institution may create its own posters. If an
institution prints its own, the following language is suggested but is
not required:
Home Mortgage Disclosure Act Notice
The HMDA data about our residential mortgage lending are
available for review. The data show geographic distribution of loans
and applications; ethnicity, race, sex, and income of applicants and
borrowers; and information about loan approvals and denials. Inquire at
this office regarding the locations where HMDA data may be
inspected.
2. Additional language for institutions making the
disclosure statement available on request. An institution that
posts a notice informing the public of the address to which a request
should be sent could include the following sentence, for example, in
its general notice: "To receive a copy of these data send a written
request to [address]."
{{10-31-08 p.7298}}
Section
203.6--Enforcement
Paragraph 6(b) Bona fide errors.
1. Bona fide error--information from third parties. An
institution that obtains the property-location information for
applications and loans from third parties (such as appraisers or
vendors of "geocoding" services) is responsible for ensuring that
the information reported on its HMDA/LAR is correct.
[Source: 60 Fed. Reg. 63396, Dec. 11, 1995, as amended at 62 Fed.
Reg. 28626, May 27, 1997; 62 Fed. Reg. 66260, Dec. 18, 1997; 63 Fed.
Reg. 70997, Dec. 23, 1998; 64 Fed. Reg. 70992, Dec. 20, 1999; 65 Fed.
Reg. 80735, Dec. 22, 2000; 66 Fed. Reg. 66295, Dec. 26, 2001; 68 Fed.
Reg. 31592, May 28, 2003, effective June 27, 2003; 68 Fed. Reg. 74833,
December 29, 2003, effective January 1, 2004; 69 Fed. Reg. 77139,
December 27, 2004, effective January 1, 2005; 70 Fed. Reg. 75719,
December 21, 2005, effective January 1, 2006; 71 Fed. Reg. 77247,
December 26, 2006, effective January 1, 2007; 72 Fed. Reg. 72235,
December 20, 2007, effective January 1, 2008; 73 Fed. Reg. 63336,
October 24, 2008, effective October 1, 2009, mandatory compliance for
loan applications taken on and after that date and for loans that close
on and after January 1, 2010 (regardless of their application dates)]
[The page following this is 7301.]
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