LendingPatterns™ is more than a HMDA fair lending analysis tool.  New in LendingPatterns™ are two pipeline reports that analyze the average processing time by action taken.  Even though the reports cannot be used for monitoring secondary hedging/coverage positions, they nevertheless impart valuable insights regarding backroom operation efficiency and decision making.  The reports analyze the time between application date and action date using privately uploaded HMDA data.  Specifically, users can analyze the disparity in processing time to decisioning by race, income, and tract majority race.

Identify Critical Areas

One report, found in the LendingPatterns™ Lender Overview Module (specifically Report #18, “Comparison of Average Time in Pipeline”), allows users to analyze the average time by a specific geography or entire lending footprint.  Apply the borrower and application filters in Steps 5 and 6 to see if processing time varies by loan amount, loan purpose, loan type, income, investor, tract income, etc.  The ability to drill down enables users to get a granular view of their pipeline performance in enlightening and customized ways.

For users wanting to analyze processing time on a prohibited basis, within the LendingPatterns™ Disparity Analysis module, select report #28, “FFIEC Underwriting Risk Factor U2 (Processing Time) Analysis”.  This report analyzes whether the mean processing time differences, within individual action taken codes, are statistically significant based on T-test results.  Users can even analyze disparities in processing time by specific denial reason.  Statistically significant differences are highlighted for easy identification.

There is no out of the box blueprint for success but starting with an analysis of the average time in pipeline using LendingPatterns™ makes cents (pun intended).  Processing times should be monitored frequently and continuously to ensure that policies are properly carried out; cumbersome or obsolete processes are revised to reflect business and regulatory changes; and corrective measures are taken.