Preparing for 2018 HMDA Changes

It is no secret that 2018 will bring yet another big change for mortgage lender’s compliance policies. The 2018 Home Mortgage Disclosure Act and Regulation C (HMDA) will require public disclosure of information that illustrates whether or not mortgage lenders are serving the housing needs of their local communities. The new act mandates data collection and disclosure on applications and borrower characteristics to help pinpoint potentially discriminatory lending practices for further review. These changes will also significantly increase the number of data fields that lenders must collect and submit.

This isn’t the first major compliance change we’ve experience and it certainly won’t be the last. At Ellie Mae, we’ve been preparing to make this transition as smooth as possible for our lenders by making Encompass updates well as developing comprehensive tools and resources to help educate and train their teams.

First, we’ve made significant enhancements to our all-in-one mortgage management solution, Encompass, to support the 2018 HMDA collection and reporting. This includes:

  • Generate the Loan Application Register (LAR) – the ability to grant authority and produce the LAR directly from your system of record for filing or sharing
  • Support for Retail, Wholesale and Correspondent Channels -- the ability to report those loans you decision as well as those that you purchase or repurchase
  • Support for Covered Transactions -- the ability to report not only closed end transactions but also HELOC, Reverse Mortgages, Assumptions, NY CEMA’s etc.
  • Multiple Legal Entity Identifier (LEI) Support -- the ability for lenders to establish and use a HMDA Profile for each LEI to be used within their organization.
  • Calculate the Universal Loan Identifier (ULI) – system utilizes your LEI to correctly calculate, format and export the ULI or to store and export the ULI previously generated on a purchased transaction
  • Relied Upon Factors Configuration -- the option for lenders to configure which fields they use in their normal underwriting practice as relied upon factors for Income, CLTV and DTI for HMDA reporting purposes.
  • Demographic Data Updates -- providing consistent prioritization and reporting of the maximum five codes to be reported on the Loan Application Register (LAR) for loan scenarios where the consumer identifies with more than five choices in race and/or ethnicity.

In addition to these Encompass updates, we’ve also pulled together the essential resources to ready companies ahead of the new regulation all in one place: the Ellie Mae HMDA Resource Center. Fundamental tools include:

  • Expert Town Hall -- on Thursday, November 16, at 11:00am PT/ 2:00pm ET, I will be joined by HMDA compliance experts to discuss the impact of the changes and what organizations need to do today to succeed in 2018. Click here to register for the webinar.
  • FAQ Document -- addressing the most pressing questions about HMDA.
  • HMDA: The New Frontier of Reporting Whitepaper -- discussing what’s changing and how to ensure continued compliance success.
  • HMDA Compliance Training -- offers complete education solutions including an online learning management system (LMS) with course work on the practical application of HMDA.
  • HMDA Policy Manual -- covering all the key topics to help lenders meet their regulatory and internal compliance requirements. As a bonus, the manual may be customized with your organization’s name, logo and benefits businesses of any size and structure to save you developmental time and resources.

And as always, lenders can find more information about the upcoming HMDA changes and how Ellie Mae is ensuring complete compliance with regulatory updates, by visiting our Compliance Central.

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