Changes are coming that will make the current Home Mortgage Data Act seriously more complex and complicated, with the drop last week of the proposed rule expanding the data to be reported while revising the formatting and tools involved.
That was the core concern and message of a panel at the Mortgage Bankers Association’s 102nd Annual Convention and Expo in San Diego, California. Nearly 4,500 real estate finance professionals are in San Diego this week for the convention.
“This is an early disclosure of what will be required several years from now,” said moderator Richard Hill, vice president of industry technology for the Mortgage Bankers Association.
A copy of all 800-plus pages of the rule, which is updating the reporting requirements of the Home Mortgage Disclosure Act, can be found here. Lenders and others in the industry have raised both concern and praise for the update to HMDA reporting requirements.
“The Home Mortgage Disclosure Act helps financial regulators, the public, housing officials, and even the industry itself keep a watchful eye on emerging trends and problem areas in the nation’s mortgage market – the largest consumer financial market in the world,” said Consumer Financial Protection Bureau Director Richard Cordray, when it was unveiled. “With today’s final rule we are shedding more light to foster better understanding of the market, and also ensuring that lenders have sufficient time to come into compliance.”
The new required information includes the property value, term of the loan, and the duration of any teaser or introductory interest rates.
Further, financial institutions will be required to provide more information about mortgage loan underwriting and pricing, such as an applicant’s debt-to-income ratio, the interest rate of the loan, and the discount points charged for the loan.
The CFPB says that this information will enhance the ability to screen for possible fair lending problems, helping both institutions and regulators focus their attention on the riskiest areas where fair lending problems are most likely to exist. Further, this information is also supposed to help monitor developments in specific markets such as multifamily housing, affordable housing, and manufactured housing.
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Most of the provisions of the final rule will take effect on Jan. 1, 2018. Lenders will collect the new information in 2018 and then report this information by March 1, 2019, said Ren Essene, program manager of mortgage data assets at the CFPB.
“I think you’re going to be pleased with how we’ll address the feedback we got,” Essene said.
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She said that the CFPB is sensitive to the fact the industry is still making changes to implement the TILA-RESPA Integrated Disclosure/Know Before You Owe requirements.