The CFPB recently issued a consent order against Freedom Mortgage Corporation for HMDA violations. These violations mainly revolved around the collection and reporting of applicant’s demographic information and spanned four years of HMDA reporting. Specifically, the Corporation was found to have violated Regulation C by:
- Selecting non-Hispanic white for the applicant’s race and ethnicity if the applicant did not provide the information for applications taken over the phone, regardless of the accuracy of the information.
- For applications taken over the phone, they misreported the applicant’s ethnicity and race as non-Hispanic white even when the applicants provided different information.
- Rather than addressing an internal system issue that would eliminate certain information if the applicant’s sex was not provided, the Corporation selected a sex for the applicant regardless of the accuracy.
None of the errors made by the Corporation were considered to be bona fide errors as allowed by Reg C. 1003.6(b)(1) which states that a bona fide error is an error in compiling or recording data that was unintentional and occurred despite procedures in place to avoid such an error. Among other orders, the Corporation was ordered to develop and maintain new policies and procedures to ensure accurate collection and reporting of their HMDA data. They also must pay a $1.75 million civil money penalty for these violations.
Regulatory Solutions has developed proprietary software to scrub and verify the data in your HMDA LAR. Please contact us today to discuss how we can help you to ensure that your HMDA data is correct.
Construction loans and their compliance with Regulation Z can be a struggle. The CFPB has recently published their first set of Frequently Asked Questions specifically addressing common compliance issues for construction loans that are subject to TRID. The Frequently Asked Questions can be found at https://www.consumerfinance.gov/policy-compliance/guidance/tila-respa-disclosure-rule/tila-respa-integrated-disclosure-faqs/#construction-loans.
Regulatory Solutions provides comprehensive TRID reviews to ensure compliance with TILA-RESPA requirements. Contact us today to find out how we can assist you with your TRID and other lending compliance reviews.