HMDA App Date for Reinstated Applications
This HMDA video focuses on the requirements of the application date field for a reinstated application.
Video Transcript
The following is a transcript of this video.
Today's Compliance Clip is going to discuss the application date for reinstated applications under the Home Mortgage Disclosure Act or HMDA. This video does apply to HMDA reporters only.
Under the application date, the rule is very simple. It tells us that what we need to do is list the date the application was received, or the date shown on the application form. So we have a couple of options there, but the rule is pretty simple, and it does say that this applies except for purchased loans.
Sometimes we get questions that go beyond the scope of what this rule addresses. For example, we received a question of what if an applicant asks the institution to reinstate a previous application. For example, you may have had a counter offer that they did not accept, and they come back and say, you know, I think I do want to accept that. Or they may have withdrawn an application, or you may have denied an application. Or it was approved but not accepted, and they want to reinstate this application for whatever reason. They thought they had changed their mind, but they're back to their original request. That's what we're talking about here.
Fortunately for us, the commentary gives us the answer in Comment 3 to Part 1003.4(a)(1)(ii). Now again, 1003 is Regulation C for the Homewarage Disclosure Act. 1003.4(a)(1)(ii) is where the rules for the application date are found, but we're looking specifically at Comment 3. So Comment 3 talks about reinstated applications, and there's a couple of parts in this comment so instead of writing out the full comment I've given you those parts.
The first part here is we have to determine what calendar year the original application was received. So if we are getting this reinstatement in February or March but the original application was received back in November or December, then this rule just doesn't apply at all and we treat that reinstated application as a brand new application all together. So the only time we can reinstate a previous application under HMDA, at least the way they recognize it, is if we have a request to reinstate it in the same calendar year.
Now, if it was taken within the same calendar year we do have some options as far as how we handle this. Under Comment 3, the first option is to treat a reinstated application as a new application and the second option then is to treat it as a continuation of the prior application. Those are our two options.
This directly relates to what we list in the uniform loan identifier, the ULI field. So if we use the same ULI as before, then we are supposed to treat it as a continuing application. If we treat it as a new ULI in the ULI field for HMDA reporters, then we would treat this as a new application. So, if we treat it as a new transaction, for the application date, what we need to do is list the requested date. The date they requested to reinstate that, that becomes our new date. So, we are treating that as a new application and we would also have a new ULI. That's option one. Again, that has to be within the calendar year in order for that to apply.
Otherwise, if it's not in the calendar year, you list the new date. If it's a continuation, then you list the original application date,
That is all I have for today.
