HMDA Application Date for Indirect Applications
This HMDA video covers the requirements of the application date field for indirect applications.
Video Transcript
The following is a transcript of this video.
This Compliance Clip is going to discuss the application date for indirect applications when you are reporting under the Home Mortgage Disclosure Act.
This example says to list the date the application was received or the date shown on the application form. Now, sometimes we get questions that relate to the application date but are answered in the rules. Such as the question being what if we have an application that was not directly submitted to our financial institution.
For example, you may have an application that comes in through a broker that's a channel other than directly to your financial institution. What application date do you use?
Fortunately for us, the answer is found in the commentary of 1003.4(a)(1)(ii), which is where the requirements for the application date are found in Regulation C, and the answer is in Comment 2 to that section of Regulation C. Comment 2 talks about indirect applications and specifically it gives us three different reporting options.
The first option is that you can report the date the application was received by the employee that initially received the application. So if you're working with a broker you can list the date that it was received by the broker. The key of course in this is to have the broker to clearly document when they received it. Whether they write on the top of the application form when it was received or writing the date in by their name at the bottom of the standard early to recognize when it was received. That's your first option.
Your second option is you can use the- date the application was received by your financial institution. This may be easier for most of you because what you can do is keep a copy of the email and file that came from the broker, hopefully through a security email or if they sent the old-fashioned fax. But if it was received by fax you can keep a copy of the fax or maybe it's right on there. You can circle that or you can have a stamp that says it was received this day. But you should be consistent and develop a procedure in order to document the day your institution received it if you're going to go that route. That's your second option.
The first option again is the date received by the broker. The second option is the date received by your financial institution.
The third option would be the date shown on the application form. So this could be the date the applicant signed it. It could be the date of the broker. It could be another date stamped. So there's so many different options here. You just have to pick one and be consistent. The key is to generally be consistent in how you approach this just like how you approach the application date when you receive an application directly through your financial institution.
They do give an example in the commentary. They say to generally use the same approach for certain categories of loans or for certain divisions within the organization. So for secondary market loans you do it all the same way. For in house loans you do it all the same way and so forth.
That is our topic for today. I hope you enjoyed this short Compliance Clip.
