Whether comparative files show second-review bias from mortgage pricing

Situation

After a branch that stopped taking applications in one ZIP, mortgage pricing residual by prohibited-basis group is what CRA strategist can touch in a manufactured-housing lender with dealer-originated files. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this Pricing and Credit Limits file.

Decision

CRA strategist in a manufactured-housing lender with dealer-originated files must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using mortgage pricing residual by prohibited-basis group after a branch that stopped taking applications in one ZIP.

Hypotheses to test

• The population in mortgage pricing residual by prohibited-basis group is the one a branch that stopped taking applications in one ZIP named, so Remove access or reverse the item follows for this Pricing and Credit Limits file.
• The population in mortgage pricing residual by prohibited-basis group is adjacent only to a branch that stopped taking applications in one ZIP; Temporary compensating control is the honest Fair Lending call.
• A manufactured-housing lender with dealer-originated files already contained a branch that stopped taking applications in one ZIP before mortgage pricing residual by prohibited-basis group arrived; no new Pricing and Credit Limits path.
• Provenance on mortgage pricing residual by prohibited-basis group after a branch that stopped taking applications in one ZIP is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Check HMDA coding and underwriting policy against comparative files show second-review.
• Compare mortgage pricing residual by prohibited-basis group to similarly situated files, second-review notes, and reason codes after a branch that stopped taking applications in one ZIP.
• Flag any disparate-impact table CRA strategist cannot explain from mortgage pricing residual by prohibited-basis group.
• For this Fair Lending Pricing and Credit Limits file, read mortgage pricing residual by prohibited-basis group against a branch that stopped taking applications in one ZIP and write the one fact that would move comparative files show second-review for CRA strategist.

Recommendation