Now that you have filed your 2019 Home Mortgage Disclosure Act (“HMDA”) data, it is time to focus on 2020. The CFPB has issued the new 2020 Filing Instructions Guide (“FIG”) for submissions and data collection which can be found on the FFIEC website. The 2020 updates incorporate changes to the HMDA Rule issued by the Consumer Financial Protection Bureau in October 2019. The 2020 FIG can be found at https://www.ffiec.gov/hmda/guide.htm
While there are no substantial changes as to how you compile and submit your data, it is important to point out that we are seeing regulators requiring resubmissions and rescrubbing of HMDA data if it is not completed correctly. If you struggled with compiling and scrubbing last year’s HMDA data, Regulatory Solutions is here to help. Using our proprietary HMDA software, we compare your source documents in the loan file to the data points recorded on the HMDA LAR and provide you with an exception report detailing data points which need correction. Contact us today to begin your 2020 HMDA LAR Data Scrub.
The Federal Financial Institutions Examination Council (FFIEC) issued the 2020 “A Guide To HMDA Reporting: Getting it Right!”. This guide is to be used for HMDA Submissions due March 1, 2021. Regulatory Solutions, using its proprietary HMDA Software, has scrubbed over 9,000 HMDA loans/applications for financial institutions comparing the data on their 2019 and 2018 HMDA LARs to source documentation. Do not wait until 2021 to begin your HMDA scrub, contact Regulatory Solutions today. Let us provide your HMDA scrubs on either a monthly or quarterly basis so next year you will be ready to submit your HMDA LAR. The 2020 “A Guide To HMDA Reporting: Getting it Right!” can be accessed at https://www.ffiec.gov/hmda/guide.htm
On December 18, 2019 the CFPB released guidance for disclosing construction and construction-permanent loans under TRID. They published two guides on their website. The first is focused on disclosing construction and construction-permanent loans with separate Loan Estimates and Closing Disclosures for each phase of the loan and the second is on how to disclose a combined Loan Estimate and combined Closing Disclosure for both phases of a construction-permanent transaction. Both construction disclosures guides can be accessed by clicking this link: https://www.consumerfinance.gov/policy-compliance/guidance/tila-respa-disclosure-rule/.
Fannie Mae has just announced a change in their mortgage insurance forms. Any loan with mortgage insurance that is sold or securitized by Fannie Mae must be insured using one of the new approved forms. This will take effect on any loan application that was taken on or after March 1, 2020. Fannie Mae has stated that if an application taken after that time with mortgage insurance is insured under any previously approved form, it will not be eligible for delivery and will be subject to repurchase. There is an exception to this change. Loans that are refinanced into a High LTV Refinance loan may continue to be insured under the previously approved form. However, if a new mortgage insurance certificate is issued, then this exception does not apply.
On October 31, 2019, the CFPB announced an increase for the special appraisal requirements for higher-priced loans from $26,700 to $27,000. This will take effect January 01, 2020 and it will be based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as of June 1, 2019.
The special appraisal requirements for higher-priced mortgage loans was added in 2010 to TILA. This requirement makes the creditor obtain a written appraisal based on a physical visit to the home’s interior before making a higher-priced loan.
The full announcement can be found at: https://www.federalregister.gov/documents/2019
On October 10, 2019, the CFPB issued a final rule that could affect your HMDA reporting for 2020. The first part of the rule extends the 500 threshold for open-end lines of credit until January 1, 2022. This means that institutions that originate fewer than 500 open-end lines of credit in the two preceding calendar years will not be required to report these lines of credit on their 2020 and 2021 LARS.
This final rule also incorporates the partial exemptions that were laid out in EGRRCPA into Regulation C. It also incorporates clarifications that smaller institutions have encountered when collecting their data to comply with the partial exemptions. Such as, whether a partial exemption applies after a merger or acquisition.
A copy of the final HMDA rule can be found below.
At Regulatory Solutions, we have developed HMDA software in order to complete full HMDA scrubs, including for those who qualify for partial exemptions.
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