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Alert_smallYou may have recently received an email from the CFPB entitled “Update regarding HMDA data collected in or after 2017”. Rest assured, QuestSoft has you covered. We’ve been working on the new HMDA rules for over a year now. We’ll be ready for all of the new requirements in 2017, 2018 and beyond. Please continue to visit our CFPB HMDA Resource Center for the latest information and check out our CFPB HMDA Roadmap for information on deadlines and where we are in the process. Don’t worry, we’ve got this.



new_icon  CLICK HERE to check out QuestSoft's CFPB HMDA 2018 Roadmap.


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Man reading HMDA rules and throwing paper on floor

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42 new or modified data fields

The CFPB has added or modified 42 data points to be collected, recorded and reported, bringing the total number of HMDA fields in 2018 and beyond to 110! This includes the addition of Reverse Mortgages and Open-End Lines of Credit. In addition, the new HMDA rules will not be purpose driven for consumer loans. The new rules require reporting of all dwelling secured consumer transactions regardless of purpose.
CLICK HERE to see all the fields.

In October 2016, QuestSoft published final CFPB HMDA specifications to LOS partners and authorized customers. Customers can also obtain specifications via our website (via a signed Non Disclosure Agreement [NDA]). Download NDA [PDF] 

New Government Monitoring Information (GMI) Demographic fields


On September 28, 2016 the CFPB issued a notice detailing its approval of the use of the new 2016 Uniform Residential Loan Application (URLA) for the expanded collection of information relating to ethnicity and race under the Home Mortgage Disclosure Act (HMDA).

The bureau said financial institutions may use the new URLA between Jan. 1, 2017, and Dec. 31, 2017, to collect certain disaggregated race and ethnicity data. The bureau specified that the data collection is not a violation of Regulations B’s or C’s provisions regarding data collection.

The CFPB also said the 2016 URLA is approved under Regulation B provisions related to requests for information regarding spouses and marital status.

CLICK HERE to view the issued final rule.

Will QuestSoft’s Compliance RELIEF allow for importing of the new GMI Demographic fields in 2017?

At this time, since the new demographic fields will not be part of the 2017 CFPB submission; QuestSoft has opted not to include these fields in our 2017 HMDA module. We believe this will simplify an already complex transition.

All 2018 imports will allow for the new demographic fields. And our 2018 CFPB Testing Module is available now for testing imports with Compliance RELIEF.

 




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Your step-by-step roadmap to HMDA reporting success

First of all, don’t panic! QuestSoft will have you covered every step of the way. We’ve been in the HMDA business for 20+ years and we anticipated many of these changes immediately after the mortgage crisis of 2008. In fact, many of the “new” fields have been optional in HMDA RELIEF for years!

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new_icon  CLICK HERE to check out QuestSoft's CFPB HMDA 2018 Roadmap.

The next two years will see a rise in cottage industries who will claim to understand these rules and gladly take payment to help you comprehend them. We suggest however, taking a step back to let the regulation evolve into a natural part of your company’s general best practices. The intent of the Home Mortgage Disclosure Act has always been noble and that has not changed. In the next year, compliance officers should become familiar with these rules and develop plans for the accurate entry of the new data points. Front line training should begin in 2017.

With the CFPB's release of the technical specifications and enumerations for the new HMDA data, your Loan Origination System (LOS) vendors will now be able to add the new fields to their systems, but this will take time. QuestSoft is in contact with the CFPB and all of our LOS partners and we will keep our customers informed via this HMDA Resource page and our social media outlets:

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Luckily, due to the new Truth in Lending RESPA Integrated Disclosures (TRID) as well as other new rules, much of the base information being requested in the new HMDA is already part of your LOS. In addition, export files will use MISMO 3.3 or higher. Most LOS vendors will be using that interface standard by the end of the Q1 2016. This should lessen the burden substantially, leaving companies like QuestSoft -- who specialize in HMDA and automated compliance -- to help you prepare for 2018.

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HMDA Institutional Coverage Documents




         2017 hmda institutional coverage rules                        2018

CLICK FOR 2017 COVERAGE RULES CLICK FOR 2018 COVERAGE RULES



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New loan types, mandatory GMI and denial reasons, and more with new HMDA rules…

The big change to HMDA will be evident to lenders and vendors who specialize in HELOCS and new loan types not normally associated with mortgage software. Since HELOCS have been traditionally optional for HMDA reporting, most consumer loan software used in banks and credit unions does not include fields to collect Government Monitoring Information (GMI). This will need to change.


CFPB HMDA specifications add both GMI and denial reasons as mandatory fields starting in 2018. Therefore, if you are not currently reporting HELOCS, it would be a good idea to touch base with your vendor to make sure they will be prepared for this major change. You might even consider collecting the information by January 1, 2017 so you can run internal tests before the CFPB HMDA collection becomes mandatory in 2018. ​

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Fair Lending becomes more automated raising the risk of penalties and corrective actions

Since the fallout from 2008, HMDA has been morphing into Fair Lending. If you have not yet implemented a fair lending analysis program, now is the time.

You may find some regulators jumping the gun on the GMI/Denial Reason fields by January 1, 2017 for fair lending purposes. At present, race, sex and ethnicity information is a calculated “guess” for loan types outside of HMDA. With the expansion to commercial/consumer systems, there will now be a formalized process to collect this information. We expect these trends to continue, and lenders need to be prepared.

Fair Lending under the new CFPB HMDA will become more automated and more judgmental. The new rules will see 6,000+ lenders sending fair lending information to the CFPB. It will be very easy for the CFPB and other regulators to apply massive fair lending analysis to all of the data and release the top 10, 100 or 1,000 egregious violators along with the appropriate fee and corrective action for your lending sins. Therefore, we recommend you investigate and consider our fair lending offerings for implementation sometime in 2016 if you haven’t already.

LendingPatterns™ will give you a perspective based on almost 10 years of historic HMDA information and provide a detailed fair lending footprint of you and your peers. This web-based software is a perfect complement to small and mid-tier lender’s fair lending budgets and will ensure that you know how fair you are actually being in your lending operations, before the examiners arrive. The Fair Lending Magic™ product addresses matched pair and regression analysis which is probably something to consider if your company’s profile is higher in the industry. Contact us today for more information.

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Staff education on the new HMDA should begin now

You and your staff can get familiarized with the new HMDA reporting requirements by visiting the CFPB site at http://www.consumerfinance.gov/regulatory-implementation/hmda/

Tell your loan officers and staff that your company will be increasing data collection by twice as many fields, but that this will be phased in over the next two years. Lenders should prepare for more scrutiny on the new fields that will become part of HMDA requirements in 2018. Many of these fields are likely already in your mortgage software in some form today.

Addresses will need to be accurate at the time of application rather than just putting in placeholders to be corrected later. If this is not how you do business today, start training loan officers now! If your loan is denied or withdrawn without accurate information at the time of decision, you will need more than just census tract information to appease regulators. Actual addresses will be required in the new HMDA, and they need to be accurate.

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QuestSoft supports you with educational HMDA webinars

QuestSoft will prepare a number of webinars to provide information on what is changing, what you need to look out for, and what your organization needs to do. CLICK HERE for webinar information. And we are taking our show on the road! If you’re interested in attending a regional HMDA seminar, CLICK HERE to get information on our live HMDA Forums and sign up for one today!

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QuestSoft software updates in progress already

Absolutely. QuestSoft is already in the process of updating our software to CFPB HMDA standards and will provide upgrades as needed. Our new Compliance RELIEF platform - which features HMDA, CRA, Geocoding, Fair Lending and more - will have everything you need to adhere to the new HMDA rules and take the complexity out of compliance.

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QuestSoft products will comply with every element of new CFPB HMDA

QuestSoft products are being modified and updated to comply with every element of the new CFPB HMDA changes. We have been on top of these changes since before they were even announced and have been adding new fields to our software for the past several years. We added web submission last year as well. Rest assured, QuestSoft will be ready and able to handle everything in the new regulations before they will be required. We’ve been doing HMDA for 21 years. It’s what we do. See our CFPB HMDA Changes Webinar page for more information.

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42 new or modified data fields

The CFPB has added or modified 42 data points to be collected, recorded and reported, bringing the total number of HMDA fields in 2018 and beyond to 110! This includes the addition of Reverse Mortgages and Open-End Lines of Credit. In addition, the new HMDA rules will not be purpose driven for consumer loans. The new rules require reporting of all dwelling secured consumer transactions regardless of purpose.
CLICK HERE to see all the fields.

In October 2016, QuestSoft published final CFPB HMDA specifications to LOS partners and authorized customers. Customers can also obtain specifications via our website (via a signed Non Disclosure Agreement [NDA]). Download NDA [PDF] 

New Government Monitoring Information (GMI) fields


On September 28, 2016 the CFPB issued a notice detailing its approval of the use of the new 2016 Uniform Residential Loan Application (URLA) for the expanded collection of information relating to ethnicity and race under the Home Mortgage Disclosure Act (HMDA).

The bureau said financial institutions may use the new URLA between Jan. 1, 2017, and Dec. 31, 2017, to collect certain disaggregated race and ethnicity data. The bureau specified that the data collection is not a violation of Regulations B’s or C’s provisions regarding data collection.

The CFPB also said the 2016 URLA is approved under Regulation B provisions related to requests for information regarding spouses and marital status.

CLICK HERE to view the issued final rule.


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Will Compliance RELIEF generate a ULI for us if our LOS doesn’t?

Your LOS will mostly be responsible for ULI generation. Depending on demand, we might offer our own full ULI generator. At a minimum, Compliance RELIEF will allow you to create an individual ULI with check digit from an existing LEI and Loan Number.


Will Compliance RELIEF verify the two-digit check digit required for the Universal Loan Identifier (ULI)?

Yes, we will verify the check digit. If we offer a full ULI generator (see above), the check digit will also be generated.

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Will Compliance RELIEF generate a Legal Entity Identifier (LEI) for us?

No. If your company does not already have an LEI you will need to obtain one as soon as possible from the GMEI Utility. The website is endorsed by the Global LEI Foundation and also has a search function. There are some frequently asked questions on their website and here are a few highlights derived from those FAQs:

  • Who can register the company: You must currently be an employee of the company you are registering, and be authorized by the company to register for an LEI. Alternatively, financial institutions may use a third party through an assisted registration process. The person registering the firm will need a user account, which can be created here.
  • What information is needed to register: The basic information listed in the ISO 17422 such as the company’s legal name, registered address, headquarters address, legal form, etc.
  • How much does the registration cost: GMEI Utility charges $200 for a registration request, with a $19 surcharge. To maintain the LEI moving forward, the fee is $100 with a $19 surcharge. For more information, here are the FAQs specific to payment.
  • How long does this process take: Once payment is processed, the GMEI will validate the company using public sources. Once this process is complete, it takes about three business days for an LEI to be issued in the GMEI database. Overall, GMEI Utility’s FAQs say most requests are “cleared” within three to five business days.
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