Discount Points, Lender Credits, and Interest Rate New HMDA Regs

For the new HMDA regulation, a financial institution will now have to report more information in regards to the terms of the loan. This includes such information as the total discount points, lender credits and the interest rate.

The total discount points that are paid to the creditor to reduce the interest rate can be found on page 2 of the Closing Disclosure on Line A.01.  If there were no discount points paid, then this data point should be left blank. The other data point that can be found on the Closing Disclosure is the total of lender credits which is on page 2 Line J.  Like with the discount points, if there were no lender credits, this data point should be left blank. If a revised Closing Disclosure was issued, then the revised amounts should be reported on the HMDA LAR.

Both of these data points are to be reported as “not applicable” in the same circumstances. The first is if the application did not end in origination. The second circumstance is if the loan or application is not subject to Regulation Z. The last instance is if it is a purchased loan with an application that was received prior to the effective date of Regulation Z.

Another item that must be reported as part of your HMDA data is the interest rate. This data point must be reported for loans that originated and for those that are approved but not accepted. For applications that were denied, withdrawn or closed for incompleteness, this data point should be reported as being “not applicable”.

 

For more information on HMDA regulations, 2018 data point changes or our HMDA compliance services, please call Rhonda Wannemuehler or Betsy Reynolds at 855-734-7655.

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