CRA strategist must resolve whether dealer overlays introduce prohibited

Situation

A HMDA resubmission that still fails quality edits put appraisal-gap outcomes in majority-minority tracts in front of CRA strategist in a manufactured-housing lender with dealer-originated files. This Fair Lending / Pricing and Credit Limits close is dealer overlays introduce prohibited from appraisal-gap outcomes in majority-minority tracts, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

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 appraisal-gap outcomes in majority-minority tracts after a HMDA resubmission that still fails quality edits.

Hypotheses to test

• Appraisal-gap outcomes in majority-minority tracts reads as Remove access or reverse the item once a HMDA resubmission that still fails quality edits is lined up to the same Fair Lending population.
• Appraisal-gap outcomes in majority-minority tracts is closer to Temporary compensating control after a HMDA resubmission that still fails quality edits; Remove access or reverse the item would over-claim this Pricing and Credit Limits extract.
• Approve a documented exception is still live in appraisal-gap outcomes in majority-minority tracts for CRA strategist in a manufactured-housing lender with dealer-originated files.
• Appraisal-gap outcomes in majority-minority tracts is missing the fact CRA strategist needs after a HMDA resubmission that still fails quality edits; stop this Fair Lending close.

Analysis required

• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• Compare appraisal-gap outcomes in majority-minority tracts to similarly situated files, second-review notes, and reason codes after a HMDA resubmission that still fails quality edits.
• Flag any disparate-impact table CRA strategist cannot explain from appraisal-gap outcomes in majority-minority tracts.
• For this Fair Lending Pricing and Credit Limits file, read appraisal-gap outcomes in majority-minority tracts against a HMDA resubmission that still fails quality edits and write the one fact that would move dealer overlays introduce prohibited for CRA strategist.

Recommendation