Guidance on the Home Mortgage Disclosure Act (HMDA) provides instructions for how lenders should report each Loan Application Register (LAR) field. For most fields, the instruction is specific and leaves no room for differing interpretation or options for lenders to choose when reporting their LAR. For a handful of LAR fields, however, there is some leeway. In these cases, the lender has some flexibility in determining which of a possible variety of values they report.
While this flexibility can be helpful, it also provides for potential inconsistency, and subsequent inaccuracy in HMDA reporting. For example, if one group of loan officers at an institution identifies the Application Date as the day the loan application was received while another group uses the date the loan officer signed the completed application, HMDA LAR entries may vary. Lenders should have clear, documented procedures, including identification of HMDA field source documents; and, all staff responsible for HMDA field recording and compliance should receive periodic training on those procedures.
Click through to the infographic below for four HMDA field examples where field source can vary, so consistency in procedures and reporting is “key”.
