Abrigo

 All applications have an application date, even if there is no written application. 

 All applications have a collateral address. Even if the street address is not known (as in “xxx Fulton Ave”), which will be rare for Bank Operations applications, we still have the city, county, and state. What information we do have, should show up on the LAR. 

✪   Multiple addresses: Where there are multiple collateral addresses, pick one, preferably in a Low-to-Moderate income tract, and report location data on that one. But REMEMBER: the value of all collateral (including non-RE) should be added together for value-reporting purposes.

Loan Purpose

✪  Purchase: A home purchase loan is a transaction in which title or ownership rights to a home changes hands. 

These transactions include fixed or adjustable rate mort

✪   Refinancing: A common exception is to report home improvement or “other” purpose when the application is actually for a refinancing. 

• If any dwelling-secured mortgage will be paid off as part of the transaction, it is a refinancing. This includes private mortgages. 
• The dwelling on the old mortgage  does not have to be the same as the new collateral.
• At least one applicant must be common to both mortgages.

✪   Multiple purpose: Reporting hierarchy:

• If the loan is for a home purchase and any other purpose, report home purchase.
• If the loan is for a refinancing and home improvement or “other,” report refinancing.
• If the loan is for home improvement or “other,” report home improvement.
• Report “other” only if no other purpose applies.

✪   Commercial lenders:

• Do not report “other” purpose on business loans. If a business loan is not for home purchase, home improvement, or refinancing of a dwelling-secured loan, it is not reportable under HMDA rules.
• Be specific as to loan purpose. What is the borrower going to use the money for? It is not enough to just say “refinancing.” What is the applicant refinancing? How will he/she use the money? Is he/she going to remodel an apartment building? Does he/she want it for contingencies? 

Applicant Demographic Information (ADI)

When a person submits an application for credit and offers a dwelling as collateral, HMDA requires the bank to collect the applicant's personal data and report it to the Federal Reserve on our annual Loan Application Register (LAR) submission.  

The Applicant Demographic Information (ADI) consists of the ethnicity, race, and sex of the applicant.

The ADI must be compiled or attempted for each applicant that is not a formal business entity (active corporation or LLC).

Codes for reporting the source of ADI:

• Code 1 - obtained by visual observation (VO) or surname
• Code 2 - Not obtained by VO or surname

Rate Spread

The net interest rate spread (or profit margin) is the difference between the interest rate a bank pays to depositors and the interest rate it receives from loans to consumers. The net interest rate spread is instrumental to a bank's profitability. 

✪   Lock date: 

• If the loan is for a HELOC that is (or would have been) eligible for the promotional terms: Lock date = application date.
• All other Bank Operations loans: Lock date = Action date (origination date or date you determine the application, although approved, will not be accepted by the applicant.

✪   Calculating Rate Spread

Introductory Rate

• Use the introductory rate to calculate the spread NOT what the rate will be after the introductory period.
• Rate set date is the date of the application NOT the date of closing.

Non-introductory Rate

• Rate set date is the date on the origination note.

Click here to access the Rate Spread Calculator.

HMDA Glossary

Click here for the FFIEC - HMDA Glossary containing terms and definitions applicable to HMDA.