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When it comes to your client’s data, your main priority should rightly be keeping it secure from any third parties. However, when the time comes to deliver the data and you have accidentally omitted a piece of information, it can have serious consequences for you and your business.

Here is a brief update about HMDA data requirements and penalties incurred if conditions aren’t met.

What Are the Regulations on HMDA Data?

As part of the Home Mortgage Disclosure Act of 1975, all financial institutions and lenders that meet certain requirements must keep a Loan Application Register (LAR) and submit it to the government for public disclosure.

These data requirements were increased by the Dodd-Frank Act and now ask for data from a variety of areas, including:

  • Information about the application (date, type, the property involved, purpose, etc.)
  • Information about the applicant (race, ethnicity, gender, income, age, etc.)
  • Information on the loan status (approved/denied, term, rate, lender credit, etc.)

These data fields were further expanded in January 2018 to now include fields such as:

  • CLTV and DTI ratios
  • NMLS Identification
  • Loan Channel
  • And many more

What Are the Penalties?

Penalties for violating the HMDA can be financially severe, as one national mega independent mortgage company discovered in 2017 when they were fined $1.75 million for failing to report on mortgage transactions between 2012 and 2014.

The mortgage lender was also ordered to go back and fix all of their false reports from that period, meaning any violations cost extra money and time.

How Can I Prevent False Data?

ComplianceTech understands how difficult it can be to keep track of your data for HMDA submissions. Our HMDA prep tool in Fair Lending Magic walks you through the five-step process:  import, edit and quality check, transmittal prep, and submission.  Then, use LendingPatterns™ to analyze all your private data before you submit.

Monitoring your data and HMDA results on a quarterly basis (or even monthly) eases the reporting burden and gives you an opportunity to look for errors that may not be caught in the FFIEC edits. Don’t wait until year-end to clean up your HMDA data.

LAR submission and fair lending analysis are difficult tasks for any lender, so make sure you have the best tools at your disposal with ComplianceTech. Give our HMDA and fair lending experts a call today at (202) 842-3800 and make sure your records are on the right side of the law.