The Consumer Financial Protection Bureau (CFPB) is seeking to expand the data that is submitted by lenders to the Home Mortgage Disclosure Act (HMDA) database.
Starting in January 2018, lenders will be required to collect additional borrower data including the duration of the loan, total points and fees, the length of any teaser or introductory interest rates, and the applicant or borrower's credit score. Starting in 2019, they will be required to report this data.
In addition, the CFPB is considering asking lenders to provide additional underwriting and pricing information, such as the interest rate, the total origination charges and the total discount points of the loan.
The bureau is also considering asking lenders to provide additional underwriting and pricing information, such as the interest rate, the total origination charges and the total discount points of the loan.
What's more, the bureau is considering asking lenders to include an explanation of why a particular loan application was rejected – or, if approved, whether the lender considered the loan a "qualified mortgage" upon origination. It is also considering asking lenders to provide each borrower's debt-to-income ratio to see whether lenders are adhering to the bureau's ability-to-repay rules.
However, as with any such database, there is a question as to whether – and, if so, how – the legacy data should be updated to include the additional data points. Doing so would allow for more accurate comparisons and would do much to preserve the functionality and accuracy of the database.
The question is, will lenders be expected to provide the additional data when resubmitting HMDA information? This is something that occurs when errors are found.
As such, the CFPB is seeking public feedback on the resubmission of mortgage lending data. Given the fact that additional new data is now being collected, the current resubmission guidelines may need to be updated, bureau officials state in a press release.
"The HMDA is a valuable asset in helping detect trends and problem areas in the nation's mortgage market, and the recent improvements to the rule will foster better understanding of that market," says Richard Cordray, director of the CFPB, in a release. "With today's request for information we are seeking feedback from stakeholders on how best to ensure the accuracy and reliability of mortgage lending information."
The bureau says it is important that the data in the HMDA database is accurate because it is used as an enforcement tool.
Specifically, the bureau is seeking feedback on its proposed use of resubmission error thresholds and how they should be calculated. It also invites comments on whether the thresholds should vary with the size of the submission or kind of data, as well as the consequences for exceeding a threshold.
The bureau is also seeking feedback on how it conducts its mortgage lending data integrity reviews and any technological or other changes that might be made to the data editing and collection process to help reduce errors.
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