Fair lending analytics

Fair lending analytics

Since the last modification of the Home Mortgage Disclosure Act (HDMA) went into effect, it has been a challenge for mortgage lenders to adapt to the new regulations. All financiers have been full of tasks such as adding fields to systems, testing changes, retraining staff, interpreting new requirements and making the transition between old and new formats, among others.

If you are a lender, after submitting your HMDA-LAR 2017 information, you must continue the work to finish adapting to the new realities of the U.S. mortgage market. One of the critical factors of the process is the effect that the new regulations have on your monitoring system.

Adjusting The Numbers

A fundamental aspect of this process of change is how to adapt your fair lending analytics to manage, study and obtain valuable information from the new unique data fields included in HMDA 2018. Also, your analytics are fundamental in case of examinations, or to face any undesirable accusation on the part of the users.

Currently, there is still little or no guidance or regulation regarding expanding your analysis on fair loans with the new format. The wisest thing is not to wait and design an internal plan that prepares your company to face any of these situations mentioned. This will require more effort on the part of the statistics and fair lending departments, but prevention is better than regret.

Designing a Preventive Strategy

To be prepared for any scenario, it is necessary to address these three critical points:

  1. When will be your next fair lending exam, which contemplates the new regulation?

The time of the next examination will vary from one financial institution to another. To get an idea of the likely date of your evaluation, you may consult with your regulatory agency. If this is not possible, consider the historical periods of your previous exams.

Also, keep in mind that regulators will take precedence over large banks. In that sense, small banks and other minor lending institutions should not be evaluated in the short term. In any case, in the face of uncertainty, it is better to be ready as soon as possible.

  1. When to Modify Your Fair Loan Analysis

It is best to test your new analysis models now. This way, you'll make sure your study and monitoring systems work by the time you've collected enough information to produce meaningful and reliable analyses. The good idea is to set a deadline for testing so that the team focuses on having the renewed models ready.

  1. How You Will Handle The New Information

With the new changes, your mortgage data analysis system is likely to be outdated. Also, the technological tools you have may not be able to assimilate the new reality dictated by HMDA.

To regain control of your fair lending analytics, and begin to manage the new parameters, you can count on an exceptional state-of-the-art application, such as our Fair Lending Magic™. Our tool automates fair loan risk analysis and compliance. Also, it provides you with tools to efficiently manage your risk management analysis and lending practices. Contact us to request your demo and enjoy all the benefits of our powerful software.

We look forward to hearing from you.

Fair lending analytics
We Specialize In:

View Larger Map

We welcome your comments!

Fair lending analytics Fair lending analytics

Sales Information

LendingPatterns™ Support

Fair Lending Magic™ Support

Request a Demo
First Name*
Last Name*