Business Purpose Loans and the New HMDA Rules - 12-21-2015

[Pages:1]Business Purpose Loans and the New HMDA Rules - 12-21-2015 by kblanchard@ - -

Business Purpose Loans and the New HMDA Rules

by kblanchard@ - Monday, December 21, 2015



Among the many new fields introduced by the revised HMDA requirements, effective 1/1/2018, there are a number that will not be reported for loans not subject to Regulation Z, such as business purpose loans, or where the borrower is not a natural person. This will, of course, help small business and commercial lending areas.

Project plans for those areas will not have to develop processes to identify and report data for these fields; Not Applicable (NA) will be reported instead.

The new data points that will be reported as NA for business purpose and other loans not subject to Regulation Z are:

Total loan costs Total points and fees Borrower paid origination charges Discount points Lender credits Prepayment penalty term

Additionally, rate spread and HOEPA status will continue to be reported as NA for business purpose loans.

NA will also be reported for the following data points when the borrower is not a natural person, a frequent occurrence for business purpose loans:

Ethnicity, Race and Sex (sane as current HMDA rules) Age Income (same as current HMDA rules) Credit Score Debt to Income Ratio Automated Underwriting System

There are still a number of new data points that will apply to business purpose loans, but there is some relief in that the ones above can always be reported as NA.

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