Assess whether a model update needs a fair-lending revalidation (c4038a)

Situation

The Redlining and HMDA Data desk packet is geographic application and origination heat map after a community complaint about appraisal gaps. Community-development lender in a mortgage company after a pricing-regression spike must name Remove access or reverse the item or Temporary compensating control for this Fair Lending file. Community-development lender in a mortgage company after a pricing-regression spike has to name Remove access or reverse the item or Temporary compensating control for this Fair Lending Redlining and HMDA Data file.

Decision

Community-development lender in a mortgage company after a pricing-regression spike must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using geographic application and origination heat map after a community complaint about appraisal gaps.

Hypotheses to test

• Geographic application and origination heat map reads as Remove access or reverse the item once a community complaint about appraisal gaps is lined up to the same Fair Lending population.
• Geographic application and origination heat map is closer to Temporary compensating control after a community complaint about appraisal gaps; Remove access or reverse the item would over-claim this Redlining and HMDA Data extract.
• Approve a documented exception is still live in geographic application and origination heat map for community-development lender in a mortgage company after a pricing-regression spike.
• Geographic application and origination heat map is missing the fact community-development lender needs after a community complaint about appraisal gaps; stop this Fair Lending close.

Analysis required

• Test a documented exception versus a pattern a mortgage company after a pricing-regression spike must defend.
• Match the adverse-action language to the facts in geographic application and origination heat map.
• Check HMDA coding and underwriting policy against a model update needs.
• For this Fair Lending Redlining and HMDA Data file, read geographic application and origination heat map against a community complaint about appraisal gaps and write the one fact that would move a model update needs for community-development lender.

Recommendation