In fall of 2015, the CFPB introduced new data reporting requirements which are set to take effect next year under the 1974 Home Mortgage Disclosure Act (HMDA), updating existing rules which will make lenders provide information on property value, the terms of the loan, the term of prepayment penalties and the duration of teaser or introductory interest rates. The HMDA was intended to address problems faced by minorities in gaining access to a mortgage, and requires lenders to collect data from the purchase, home improvements, and refinancing and report that data to federal regulators.
However, the increased amount of data which the CFPB has required lenders to report has led increased complications. Several lenders and trade groups have asked for clarification on the definition and reporting requirements for new HMDA reporting categories, such as “loan purpose” the unique identifier for the originator of the loan.
In a statement, the CFPB let firms know that they can avoid reporting on those topics if they do not have the information due to loans which were purchased from a third party. In addition, the CFPB stated that incorrect information while using a geocoding tool will not mean the lender will be held accountable under HMDA.
“The Home Mortgage Disclosure Act shines a much-needed spotlight on the mortgage market, which is the largest consumer financial market in the world,” CFPB Director Richard Cordray said in a statement. “Today’s proposal reflects the bureau’s ongoing and substantive engagement with stakeholders in the marketplace, and will help industry meet its new reporting obligations.”
In addition to adding more data points to be reported, the CFPB’s new HMDA rule will make reporting data online easier.