Revisions to reporting of home mortgage data, reflecting changes made under this spring’s regulatory relief legislation (and consistent with changes made by the federal consumer financial protection agency) are being proposed by the Federal Reserve, according to filings Monday with the Federal Register.
The central bank said it is proposing to revise its form collecting data required under the Home Mortgage Disclosure Act (HMDA) and the Loan Application Register (LAR) (the Fed’s form FR HMDA-LAR, Office of Management and Budget (OMB) number 7100- 0247).
UPDATED: Comments on the proposed form, published Tuesday, are due in 60 days (by Oct. 29).
In its Register filings, the Fed said it proposes expanding the data reported and modifying the data types banks and other institutions are required to report, as well as the types of loans required to be reported.
However, the proposed changes also reflect statutory changes enacted in May under the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA, S.2155 – regulatory relief legislation). That legislation amended HMDA to exempt some federally insured banks, savings associations and credit unions from reporting certain data points. Exemptions were made under the law for institutions which originated fewer than 500 closed-end mortgage loans in each of the two preceding calendar years, and for those that originated fewer than 500 open-end lines of credit in each of the two preceding calendar years. (The Fed also said it estimates that that institutions eligible for the partial exemption will report approximately half the data points currently required by the BCFP’s final rules for non-exempt institutions.)
The Federal Reserve’s proposed changes, it noted, are also consistent with the Bureau of Consumer Financial Protection’s (BCFP) final rules amending Regulation C, effective Jan. 1, 2018.
For an institution that is not exempt from reporting, the Fed wrote, as of Jan. 1 of this year it is required to collect and report all required data points required under HMDA if the institution either originates 25 or more closed-end mortgage loans or 500 or more open-end lines of credit secured by a dwelling in each of the two preceding years, in addition to meeting other applicable coverage criteria.
“For these institutions, the final rules standardize the loan volume threshold used to determine coverage of both depository and non-depository institutions. An institution will only report a covered loan if it has met the loan origination threshold for that loan category (open-end or closed-end),” the Fed wrote.
The Fed notice points out that the final rules generally will require covered institutions to collect and report any mortgage loan secured by a dwelling, including open-end lines of credit, regardless of the loan’s purpose.
But there are exclusions of formerly reported data, the agency stated. “However, the final rules exclude unsecured home-improvement loans (which historically were required to be reported), dwelling-secured loans that are made principally for a commercial or business purpose, agricultural–purpose loans, and other specifically excluded loans,” the Fed stated.
The Fed said the final rules also will require collection of additional data points in 2019 for those institutions that are not eligible for the partial exemption. These new data point fields include:
- additional information about the applicant or borrower, such as age and credit score;
- information about the loan pricing, such as the borrower’s total cost to obtain a mortgage, temporary introductory rates, and borrower-paid origination charge;
- information about loan features, such as the loan term, prepayment penalties, or non-amortizing features (such as interest only or balloon payments);
- additional information about property securing the loan, such as property value and property type.
In addition, the Fed pointed, the BCFP’s final rules amend several existing requirements, including the requirements for collection and reporting of information regarding an applicant’s or borrower’s ethnicity, race and sex.
According to the Fed, the BCFP will collect the HMDA/LAR data on behalf of each applicable federal supervisory agency, and the data will be combined and aggregated for each Metropolitan Statistical Area (MSA). “Certain aggregated data will continue to be publicly available, though the Bureau has yet to determine what the information collected in the new data fields will be disclosed once the final rules are fully effective,” the Fed stated.