GSE Patch Under Review By CFPB
On July 25, 2019, the CFPB issued an advance notice of proposed rule making looking for feedback on the expiration of the temporary GSE patch. This patch specifically grants Qualified Mortgage status to loans eligible to be purchased or guaranteed by Fannie Mae or Freddie Mac. As it stands, the GSE patch will end in January 2021 and the CFPB has stated their intention to let it expire. Along with announcing the expiration of the GSE patch, the CFPB is asking for feedback as to whether the definition of a Qualified Mortgage should be revised.
The full text of the advance notice with instructions on submitting feedback can be found here: https://files.consumerfinance.gov/f/documents/cfpb_anpr_qualified-mortgage-definition-truth-in-lending-act-reg-z.pdf
HMDA Scrub Sample Size
What percentage of loans or applications on the HMDA LAR should I scrub?
This is a question we get asked quite often and my response is that you should look to the percentage examiners scrub. The Federal Financial Institutions Examination Council’s (FFIEC) HMDA Examiner Transaction Testing Guidelines (Guidelines) describe the validation process which examiners use and the circumstances in which examiners may direct institutions to correct and resubmit HMDA data. The examiners select a random sample of loans/applications to test using the following sample sizes and thresholds as indicated in the Guidelines at https://files.consumerfinance.gov/f/documents/201708_cfpb_ffiec-hmda-examiner-transaction-testing-guidelines.pdf:
| Total Sample Size (A) | Initial Sample Size (B) | Initial Sample Threshold (C) | Resubmission Threshold (D) | ||
| # | % | ||||
| 25-50 | 30* | 15 | 2 | 3 | 10.0* |
| 51-100 | 30 | 20 | 2 | 3 | 10.0 |
| 101-130 | 47 | 29 | 2 | 3 | 6.4 |
| 131-190 | 56 | 29 | 2 | 3 | 5.4 |
| 191-500 | 59 | 30 | 2 | 3 | 5.1 |
| 501-100,000 | 79 | 35 | 2 | 4 | 5.1 |
| 100,001+ | 159 | 61 | 2 | 4 | 2.5 |
*If less than 30 LAR lines, the institution should use the full sample size and the resubmission threshold remains at 3.
Let us scrub your HMDA data against source documents and provide you with an exception-based report indicating the percentage of errors by data point. You select your sample size either using the Guidelines or a certain percentage of HMDA loans/applications. Contact us today to discuss your HMDA scrub.