CFPB Flags Lenders for Possible HMDA Violations

first_img October 27, 2016 612 Views The Consumer Financial Protection Bureau (CFPB) has issued a letter of warning to 44 mortgage lenders and brokers that they may be in violation of the Home Mortgage Disclosure Act (HMDA).HMDA, originally enacted in 1975, requires financial institutions to collect data related to mortgage lending activity such as home purchase loans, home improvement loans, refinancings they originate, purchase, or for which those institutions receive applications. HMDA’s goal is to monitor whether financial institutions are serving the needs of their communities, attract private investment, and identify possible discriminatory lending patterns.Data collected as required by HMDA is reported to appropriate regulators annually and made available to the public, according to the CFPB.The CFPB finalized a rule in October 2015 that updated the reporting requirements of HMDA to improve the quality and type of data that institutions are collecting. Most of the final rule’s provisions will go into effect on January 1, 2018.“Financial institutions that fail to report mortgage information as required make it harder to identify and address discriminatory lending,” said CFPB Director Richard Cordray. “No mortgage lender that is required to report their loan data can avoid this responsibility.”The CFPB identified the 44 companies to which it is warning of possible HMDA violations by reviewing available bank and non-bank mortgage data. The warning letters note that companies that meet certain requirements are subject to HMDA oversight, which means they are required to collect and report data on mortgage lending.In the letter, the Bureau encourages the companies to review their practices to ensure they are complying with the law, and if they are not, to advise if they have taken or will take steps to become compliant. By sending the letters, the CFPB is not stating that a HMDA violation occurred.Click here to view a sample of the warning letter issued by the CFPB. CFPB Flags Lenders for Possible HMDA Violations CFPB HMDA Home Mortgage Disclosure Act Mortgage Brokers Mortgage Lenders 2016-10-27 Seth Welborncenter_img in Daily Dose, Data, Headlines, News Sharelast_img

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