The Home Mortgage Disclosure Act deadline looms closer, but many questions still remain unanswered.
To combat this, HousingWire set to work to bring readers answers to the most asked questions as we countdown to the end of the year.
Most of the 2015 updates to HMDA take effect in January 2018.
Before reading today’s question, make sure you’re all caught up in the series by reading part one, part two and part three.
This is part four.
What will the regulators expect now and going forward?
One expert explained that in 2018, regulators will expect lenders’ reporting to be accurate and timely as well as have their Fair Lending policies already in place.
“As it will be very easy for the regulators to complete data analysis on a greater scale, expectations for lenders will be to report accurate and timely data as well as have tight Fair Lending policies and behaviors in place to serve the mortgage market consistently and fairly,” Scott Dunn, Wipro Gallagher Solutions head of product management, strategy and compliance, told HousingWire.
Another expert explained what regulators will use the data for, and what could happen to lenders who turn in inaccurate data.
“The expectation of the regulators is that the data collected from HMDA will help public and public officials understand how financial institutions are meeting the housing needs of communities,” said Beji Varghese, Navigant Capital Advisors managing director. “Additionally this reporting is designed to help public officials in identifying potential areas for investment.”
“If lenders fail to accurately calibrate transactions with the new requirements they run the risk of creating fair lending anomalies resulting in potential regulatory action,” Varghese told HousingWire. “Incorrect reporting could also result in regulatory action requiring the institution to remediate shortcomings in their HMDA process, re-submit their LAR file and potentially pay some sort of penalty.”
However, Varghese explained that regulators will expect lenders to struggle with the new requirements at first. While 2018 is sure to bring problems with reporting HMDA data, lenders should show they are actively working to update their systems and fix any problems that come up.
“We believe the regulators expect 2018 to be bumpy considering the volume of changes, however that institutions have made a good faith effort and have processes in place to monitor and continuously remediate identified issues,” Varghese said.
Check back Tuesday to read part four of this series as we count down until the end of 2017.
