HMDA Regulation C enforced by the CFBP is designed mainly to stop discriminator lending practices. A presentation I created for a lending institution this fall in preparation for the new law starting January 1, 2018.

1. HMDA
What makes a loan application HMDA-Reportable?
Approximate Completion Time: 10 minutes
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2. The CFPB enforces Regulation C
which implements the
Home Mortgage Disclosure Act (HMDA)
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3. Regulation C requires lending institutions
to collect, report, and disclose
information about their mortgage lending
activity.
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4. HMDA
Pronounced (hum-dah)
1. Help lenders serve community needs
2. Inform policy and decision making
3. Help identify possible discriminatory
lending practices
HMDA data is
collected to:
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5. 5
COURSE MAP HMDA Reportable Loan Applications
What makes
a loan
application
HMDA
reportable?
Purpose ExclusionsCollateral
(Dwelling)
Not
HMDA
Reportable
HMDA
Reportable

6. Why is it important for a lending institution
to report loan applications reliably?
Because unreliable HMDA data results in
mandated corrections, re-submissions and/or
monetary penalties.
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7. The main properties that qualify a loan
request to be HMDA-Reportable are its:
Purpose
&
Collateral
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8. *Of a dwelling
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Three Loan Purposes are defined
by HMDA*
1. Purchase
2. Remodel/Improvement
3. Refinance
Loan Purpose

9. 9
For purpose of HMDA Reporting,
collateral is a lien on a dwelling.*
Collateral
*For HMDA, a dwelling is a
place where people live – learn
more in the next section.

10. A loan application is HMDA-Reportable if the loan will be
secured by a lien on a dwelling, meets purpose criteria, and is
not excluded for any HMDA-specified reason.
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HMDA-Reportable Loans
(Applications/Transactions)

11. The main driver for a loan application to be considered HMDA-Reportable is
for it to be secured by a lien on a dwelling (collateral). For HMDA purposes,
you will learn about the three major categories of dwellings.
Dwellings
It is also important to note that for
HMDA purposes, a dwelling is not
limited to the principal or other
residence of the applicant or
borrower. Can include vacation or
second homes and investment
properties.

12. Single Family
structures
Mixed Use
Structures
Multifamily
Structures
The Three HMDA Dwelling Categories
Dwellings
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1 2 3

13. Single Family Multifamily Mixed Use Properties
 Principal residences
 Second homes
 Vacation homes
 Manufactured homes
 Investment properties
 Individual condos
 Cooperative units
 Apartment buildings
 Manufactured home
communities
 Condo buildings
 Cooperative buildings
 Retirement communities
 Permanent assisted residences
 Retail with residential rental
apartments in same
structure
 Restaurant ground floor
with residential apartments
on upper floors
Examples Examples Examples
Examples of “HMDA” dwellingsDwellings
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Click each
to view

14. Single Family Multifamily or Others Mixed Use Properties
 Transitory residences
 Recreational vehicles
 Boats
 RVs
 Houseboats
 Older mobile homes (pre
1977)
 Transitory residences
 Hotels
 Hospitals
 College Dorms
 RV parks
 The total square footage
for the residential portion
is less than 50% of the
commercial portion.
 Gross revenue for the
residential portion is less
than 50% of the
commercial portion.
Examples Examples Examples
Examples of non-HMDA dwellingsDwellings
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Click each
to view

15. Yes
No
Yes
Office Building w/ Apartments
Bottom floor is an office suite for a
real estate company. The remaining
five floors are condominiums.
FI CAPPA DAPPA
Frat House at DYU where some
residents have resided over six years!
Restaurant with Upper Apartment
Restaurant = 1200 sqft.
Apartment = 1400 sqft.
?
?
?
Click each below
Because this is a mixed-use purpose property with
the majority square footage dedicated to
residential living.
Because a Frat house is a temporary residence –
eventually they will all graduate then move back
home!
Because this is a mixed-use property where the
majority of use is residential.
Dwellings
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Is it a dwelling?

16. Yes
No
HOTEL
A large metropolitan hotel.
Mobile Home
Permanent home for Bill
Smithers.
?
?
Click each below
Because a hotel is not a permanent residence for
its guests.
Because this is a multi-family structure for
residential use.
Yes?
Because this is a permanent residence.
12-UNIT APARTMENT BUILDING
Multi-family structure.
Dwellings
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Is it a dwelling?

17. Next: LOAN CHECK
Determine if the following would be HMDA Reportable
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18. 18
A commercial loan
application for a non-
profit church to finance
the purchase of an
assisted living and
retirement group home
for the elderly.
HMDA Reportable?
Answer >>
This loan application
would be considered
HMDA-Reportable
because the residence is
considered permanent.
Yes HMDA Reportable
Click to
view
Answer

19. 19
A commercial loan
application for a non-
profit church to finance
the purchase of a group
home as a shelter for
battered women.
HMDA Reportable?
Answer >>
Not HMDA Reportable
This loan application
would not be HMDA-
Reportable because the
residence is considered
temporary in nature.

20. Loan applications are HMDA reportable if they meet the criteria of one
of the purposes below:
Dwelling Purchase
Dwelling Remodel Improvement
Dwelling Refinance
 Including Cash-Out Refinancing
Loan Purpose
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21. Refinance
Tips
1) Am I paying off a loan secured
with a dwelling?
2) Am I executing a new note?
3) Will the new loan be secured
by a dwelling and new loan is to
the same borrower and in the
same name?
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If all
three
are
Yes
The loan
application is
HMDA
Reportable
Ask Three Questions

22. Next: LOAN CHECK
Determine if the following would be HMDA Reportable
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23. 23
A borrower owns an
apartment building free
and clear and is
requesting cash out for
improvement on a
different apartment
building.
HMDA Reportable?
Answer >>
This loan application is
reportable as a home
improvement loan
because the proceeds are
primarily for
improvements on a
dwelling.
Yes HMDA Reportable

24. 24
A business customer
who first purchase
property for cash, then
applies for a mortgage
loan using the dwelling
as collateral.
HMDA Reportable?
Answer >>
This loan application is
not HMDA-Reportable
because the borrower
previously purchased the
property – it is not a
refinance because the
loan is not satisfying a
prior lien.
Not HMDA Reportable

25. Exclusions
To be HMDA Reportable, a
loan application must not be
excluded by one of the other
exclusion purposes.
HMDA
Reportable
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26. Agriculture Other Exclusions
Exclusions – Makes a Loan Not HMDA-Reportable
Exclusions
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Property used primarily
for agriculture, even
with a dwelling, is not
HMDA-Reportable
1. Secured by a lien on unimproved land
2. Temporary financing to be replaced by
permanent later

27. Next: LOAN CHECK
Determine if the following would be HMDA Reportable
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28. 28
A new Ag borrower
would like to take out a
loan to purchase a dairy
farm that includes a
farm house for her
family.
HMDA Reportable?
Answer >>
This loan application is
not HMDA-Reportable
because the property will
be used primarily for
agriculture purposes.
Not HMDA Reportable

29. 29
You take a lien on a business
owner’s personal residence as an
abundance of caution. The
business owner, however, has an
outstanding balance on an existing
home equity line of credit on his
property. The Bank does not want
to be in third position, so the you
propose an increase in the loan
amount and pay off the second.
HMDA Reportable?
Answer >>
The loan is now a HMDA-
reportable refinance, provided
that both the old and the new
loan are secured by a dwelling.
Yes HMDA Reportable

30. 30
An existing business borrower
would like to reduce the rate on his
commercial term loan that is
secured with his rental property.
The new loan will be secured by
the same rental property. In order
to reduce the interest rate, the
borrower will be signing a debt
modification agreement.
HMDA Reportable?
Answer >>
In order to report a loan as a
refinance, a new note must be
executed. In this case, since a
new note isn’t executed, the
loan will not be HMDA
reportable.
Not HMDA Reportable

31. 31
Borrower requests a refinance of a
Farm Loan secured by a 25-acre
property with a dwelling, and the
dwelling is on ½ acre, so the
primary purpose is agricultural.
HMDA Reportable?
Answer >>
The new law excludes
properties used primarily for
agriculture from being
HMDA Reportable.
Not HMDA Reportable

32. 32
Commercial customer is
purchasing a strip mall that
contains 8 retail businesses on the
first floor and apartments on the
second floor. The square footage
of the retail shops total 10,000 sq.
feet and the total square footage of
the apartments is 6,000 sq. feet.
There is an additional residence
located on the property and is not
attached to the other structure.
HMDA Reportable?
Answer >>
This loan application is HMDA
Reportable even though the
retail space in the first structure
contains a majority of retail
space.
However, since the additional
residence is not attached to the
structure containing the retail
space, the loan application is
HMDA Reportable.
Yes HMDA Reportable

33. END
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