October’s Regulatory Recap is now available here. It contains a summary of October’s regulatory actions.
While still a few months away, it is time to start thinking about your HMDA LAR reporting due March 1, 2023. The Home Mortgage Disclosure Act (HMDA, Regulation C) requires many lenders to maintain, report, and publicly disclose loan-level information about mortgages by March 1 each year.
It is important that the data in the Loan Application Register (LAR) is correct. If it has too many errors, the CFPB may require the institution to correct and resubmit the LAR. Inaccurate submissions may result in legal violations, and if a pattern or practice of non-compliance is identified, civil money penalties may ensue.
The CFPB provides a number of tools to help ensure that your LAR is correctly formatted, but what is as important, if not more, is that the data in the LAR accurately represents the loan and loan application’s information. This requires going back to the loan application and agreement to double check that the reported information accurately matches. As the internet meme goes…
I ain’t got no time for that!
That’s where we can help! Our auditors can help your institution select a sample of loans and applications that were incomplete, withdrawn, and approved but not accepted, and review them against your LAR to ensure that your reporting is accurate. Common errors identified include reporting cash-out refinancing rather than refinancing for the loan purpose, reporting Withdrawn rather than Approved Not Accepted, and reporting the wrong score or not reporting one at all for loan approved but not accepted.
We are currently scheduling for these LAR Accuracy Reviews for January and February 2023. Contact us now to get on our schedule.
Please be advised that CSG provides financial services compliance audit and consulting services to our clients. The services that we provide include certain tasks that may be characterized as “law-related services” under Rule 5.7 of the Rules of Professional Conduct governing lawyers. Since some of our employees are lawyers with an active bar license but are NOT engaged in the private practice of law, that Rule requires us to make disclosures clarifying that the services we perform may be law-related services, but they are not legal services. Because they are not legal services, those services and our relationship will not be governed by the Rules of Professional Conduct that guide the client-lawyer relationship, such as rules applicable to privileged communications and prohibitions of conflicts of interest. Notwithstanding this disclaimer, we will continue to govern our relationship with you using reasonable ethical and professional standards that are expected to meet your expectations.