Article provided by: ComplianceTech

HMDA regulation

HMDA regulation

Breezing Through the HMDA Regulation

The Home Mortgage Disclosure Act, or HMDA, is a federal law enacted by the US Congress in 1975. In 2011, the Consumer Financial Protection Bureau (CFPB) had received the rule-writing authority of Regulation C. This specific Regulation requires all lending institutions to submit reports on public loan data.

Submitting public loan data to the government is not a small thing to do. It requires delving through millions of data of lending institutions. The data typically includes all loan applications, documentation of all loans approved, and even payments made through the years. All companies are hard-pressed to meet this HMDA Regulation, and ComplianceTech is leading the way in helping lending companies meet the regulation.

Get It Right with ComplianceTech

The challenge is not on the actual reporting but on documentation, data gathering, and analyses of data. If the institutions are meticulous enough to document every step of the loan application and loan granting process, then they will have a little problem. It all calls for computerizing all the data so that the data could be automatically analyzed by software like LendingPatterns of ComplianceTech.

Regulation C had been designed to ensure that the basic right of every individual to have fair access to credit, based on their own level of credit standing without regard for race, age, color, or culture. Making the lending institutions submit the reports is a class act of the government to ensure that no predatory practices are being done at all. This forms a big part of the protection afforded by the government to the general public.

In addition, the HDMA is also important in showing the level of service given by lenders for the housing needs of the community they serve. It is an act meant to balance the freedom and right granted to the financing institutions to earn money by extending home mortgage loans. After all, these institutions are meant to ensure that the government and the private sector, together, are helping people meet the basic need of having a roof over their heads.

With software like LendingPatterns, financial institutions do not have to do guesswork on the method of gathering and preparing reports just to meet the HMDA regulation. All they must do is specify the fields, and the type of report they need, and the software does the rest. It will comb through millions of data and show the distinguishing characteristics of borrowers, neighborhoods, and markets. It will give the demographics to show percentages of loan given to each category.

Fair Lending Magic, on the other hand, makes life easy with the analyses it shows of risks that will be taken in by the institutions for the loan applications and the risks they have already taken with the loans they have granted. Through these risk reports, the company could see patterns in their practices, and make adjustments as needed. The good thing about this? Its cloud-based, which explains why it can generate reports in such a short time notwithstanding the amount of data it has to sift through.

Both software by ComplianceTech, undoubtedly, help the company not just with meeting HMDA regulation, but also keep the company healthy. Let us do what we do best, that is, protect your business.

HMDA regulation
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HMDA regulation
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