By Jeff Schmid, FIPCO
If you are like most banks running a large mortgage pipeline over the last ten months, you have had very little time to catch your breath before accepting that next application. And like most banks, your back-office support staff have had to adjust their processes and resources just to keep up the rate locks, TRID disclosures, and timely mortgage closing, all during a pandemic. But what about that pesky HMDA LAR we have all come to love and adore? It’s the last regulation down the mortgage production trough and comes in a close second to post-closing internal quality control that is required during the same time period. We really don’t have time or staff for either.
But don’t get yourself on the naughty list this close to the holidays. Unless your bank is considered a large institution, compliance with every aspect of updating your HMDA within thirty days of each calendar quarter is still in play. And even for large institutions, the only regulatory relief they saw due to COVID-19 is that their regulator would not cite it as a violation if they did not file their quarterly LAR timely. How many banks, large and small, can proudly raise their hand and say they nailed it? Not as many as you would think based on my observations.
For those of you who are required to file a HMDA LAR, we all know it was made much more difficult once the extra sets of data points were introduced, and accounting for up to five applicants on one mortgage has made your HMDA LAR as long as Santa’s list, making it almost impossible to keep it up-to-date. And while the adoption to automate HMDA systems has made reporting more efficient, we still need a few extra elves to edit, review and if necessary, scrub the LAR before it can be wrapped up with a pretty bow. Without further regulatory relief or extension of filing your 2020 HMDA LAR, bank management should consider now how to reallocate staff and resources as we head into the holiday season. Getting your HMDA LAR’s caught up in time for 2021 filing may just be a Christmas miracle.
For those banks who have seen their HMDA LAR grow three times it’s normal size, this is not necessarily a bad thing. Remember, your bank’s HMDA LAR tells a story. Not one of a baby born in a manger, but one of hundreds of people being homeowners. And as bankers, we helped those wishes come true.
So, if your bank lacks the necessary resources, or elves, to review your 2020 HMDA LAR before submission, don’t fret, ShareFI is here to help. Please contact Jeff Schmid, Director of Compliance and Management Services via email to learn how we can help your bank check this list twice.
Schmid, CRCM, CERP is director of compliance and management services at FIPCO. He can be reached at firstname.lastname@example.org or 608-441-1220.