Assess whether dealer overlays introduce prohibited steering (3c23d6)

Situation

An underwriter chat that used coded language put mortgage pricing residual by prohibited-basis group in front of exam-response coordinator in a bank with thin HMDA LAR quality. This Fair Lending / Redlining and HMDA Data close is dealer overlays introduce prohibited from mortgage pricing residual by prohibited-basis group, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

Decision

Exam-response coordinator in a bank with thin HMDA LAR quality 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 an underwriter chat that used coded language.

Hypotheses to test

• An underwriter chat that used coded language is noise around an already-controlled Redlining and HMDA Data process in a bank with thin HMDA LAR quality, given mortgage pricing residual by prohibited-basis group.
• An underwriter chat that used coded language is the event in mortgage pricing residual by prohibited-basis group that forces Remove access or reverse the item for exam-response coordinator under Fair Lending.
• Mortgage pricing residual by prohibited-basis group shows a one-file miss after an underwriter chat that used coded language, not a Redlining and HMDA Data program failure.
• Mortgage pricing residual by prohibited-basis group cannot decide dealer overlays introduce prohibited yet after an underwriter chat that used coded language; hold is the only Fair Lending close a bank with thin HMDA LAR quality can defend.

Analysis required

• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• Compare mortgage pricing residual by prohibited-basis group to similarly situated files, second-review notes, and reason codes after an underwriter chat that used coded language.
• Flag any disparate-impact table exam-response coordinator cannot explain from mortgage pricing residual by prohibited-basis group.
• For this Fair Lending Redlining and HMDA Data file, read mortgage pricing residual by prohibited-basis group against an underwriter chat that used coded language and write the one fact that would move dealer overlays introduce prohibited for exam-response coordinator.

Recommendation