Mortgage lenders morale got a huge boost July 22 when the House voted to increase FHAs maximum mortgage limits, but despite that good news, mortgage bankers could be facing a new regulatory burden thanks to a little-known provision in the housing reauthorization bill that will extend HUDs fair lending compliance authority. Tucked away in the Housing and Community Development Act, H.R. 3838, is a provision that would allow HUD to impose civil money penalties on nonsupervised lending institutions, for HMDA reporting violations. The bills nonsupervised terminology is shorthand for mortgage bankers, many of whom are presently immune to the HMDA fines that regulated lending institutions face.
The HUD mortgagee review board, one of the departments enforcement arms, has been responsible for reviewing cases of alleged violations of HMDA reporting requirements in 1993 it collected $209,000 in civil money penalties from 100 violators. HUDs penalization power, however, is limited since it can enforce only those settlements against FHA lenders.