Most mortgage lenders will be required to submit their HMDA data in machine-readable form and to update loan application registers quarterly, but they wont have to file their data a month earlier than they are doing now as a result of the Federal Reserve Boards Nov. 23 approval of the final rule to HMDA.
The amendments intend to help improve the quality of the data and make data available earlier to the public. But, based on comments received, the Board wont change the reporting deadline from the current March 1 date. The amendments to Regulation C, the Home Mortgage Disclosure Act, also provide clarification requested by financial institutions required to report under HMDA.
Lenders with 25 or fewer line entries to report will continue to be permitted to submit their data in paper form and take into account the high per-transaction cost that would otherwise be imposed on such low-volume reporters. For the 1995 data collection year, the existing rule remains in place; lenders reporting more than 100 line entries are expected to submit data in machine- readable form.
Institutions may comply with the amendments at their option beginning Jan. 1, 1995. Compliance is mandatory for the collection of data that begins Jan. 1, 1996, to be submitted to supervisory agencies no later than March 1, 1997. Other amendments to Reg C and the instructions to the loan application register, primarily to clarify reporting requirements and to improve data processing include:
Making all refinancing of dwelling-secured loans reportable to facilitate compliance. Currently, lenders have to determine whether more than 50% of the new loan proceeds will be used for home purchase, home improvement or to pay off debt originally incurred for these purposes. Revising the definition of home improvement loan to cover loans to improve a dwelling or the property on which it is situated. Clarifying that counter-offers are to be treated as denials, rather than withdrawals or approved but not accepted, if the applicant does not accept the counteroffer.
Requiring that the number of line entries included in each data submission be indicated on the transmittal sheet that accompanies the HMDA-LAR. This amendment responds to a recommendation in the report of the Boards inspector general on the HMDA processing system.
About 300 comments were received on the proposal. According to the Fed, many support the proposal, while many others raised concerns about some of the specific provisions.
