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Appraisals, collateral denials, and the potential for discrimination
Freddie Mac recently released a study Research Note pdf based on their analysis of appraisal valuations. It’s worth taking a look. The following sentence from the report summarizes the findings: Our preliminary modeling results suggest that even when taking structural and neighborhood characteristics into consideration, a property is more likely to receive an appraisal lower than…
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5 Fair Lending Myths Dispelled
After a long career in mortgage finance and fair lending I’ve attended many panels, workshops, and conferences on fair lending. All too frequently at these events, I hear someone from the audience or even a panelist declare a “fair lending myth.” A fair lending myth is a statement about HMDA, ECOA, and FH Act regulatory…
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Optimize Your HMDA Fair Lending Resources with 6 Key Factors
Optimize Your HMDA Fair Lending Resources with 6 Key Factors Lenders often face the questions, “What resources do I need to manage fair lending?” and “how much should I budget?” The truth is there is no standard answer to these questions regarding effective fair lending analysis. The human, technological, and monetary resources needed to handle…
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What’s the point of fair lending monitoring?
In my experience, there are more lenders who do little to nothing to monitor fair lending than those who actively manage it. Those that do less tend to be independent mortgage companies rather than depository institutions. I believe there are several reasons for this outcome: A) Culture and Traditions: Prior to Dodd-Frank independent mortgage companies…
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Minimizing Redlining Risk: Questions Lenders Need to be Able to Answer (Part 2)
Recent lawsuits to enforce the federal fair housing laws should serve as strong signals to lenders of an aggressive stance the government is taking regarding the enforcement of redlining under the federal fair lending laws. In Part 1, I highlighted the following five questions that every lender should be able to ask themselves and answer…
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Minimizing Redlining Risk: Questions Lenders Need to be Able to Answer (Part 1)
Lawsuits advanced by the U.S. Department of Justice (DOJ) and the Consumer Financial Protection Bureau (CFPB) are strong signals to lenders of an aggressive stance the government is taking regarding the enforcement of redlining under the federal fair lending laws. The Hudson City and BancorpSouth cases settled in 2015 and 2016, respectively, are striking for…
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7 Criticisms I have heard about Fair Lending Software Vendors
Several prospective customers recently shared specific things with me that they wish their fair lending software could do. They contacted me to set up a time to discuss their concerns and learn about ComplianceTech’s web-based suite of software for HMDA, CRA, and fair lending analysis. Since many voiced the same concerns, I thought it would…
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Auto Fair Lending: Do you monitor Dealer Markup?
The recent fair lending settlement announced by the New York State Department of Banking related to auto loans should put all auto lenders on notice. According to the settlement in New York State, two lenders failed to monitor automobile dealers that were charging minorities more in discretionary Dealer Markups than borrowers identified as non-Hispanic White.…
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HMDA Outliers: Does your credit union stand out in the crowd?
The term “HMDA Outlier” is used by the National Credit Union Administration (NCUA) and other regulatory agencies to describe part of their criteria for selecting financial institutions for fair lending reviews. Unfortunately, it can be a daunting task for a Compliance Officer to get a handle on their Home Mortgage Disclosure Act (HMDA) data and…