Assess whether pricing disparities are justified by legitimate factors

SITUATION Mortgage pricing residual by prohibited-basis group arrived with an exception rate twice as high for one group after credit controls for second-review underwriter. That is a Fair Lending Examination and Notices decision on pricing disparities are justified in a credit union rolling out a special-purpose credit program.

DECISION Second-review underwriter in a credit union rolling out a special-purpose credit program 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 exception rate twice as high for one group after credit controls.

HYPOTHESES TO TEST 1. The population in mortgage pricing residual by prohibited-basis group is the one an exception rate twice as high for one group after credit controls named, so Remove access or reverse the item follows for this Examination and Notices file. 2. The population in mortgage pricing residual by prohibited-basis group is adjacent only to an exception rate twice as high for one group after credit controls; Temporary compensating control is the honest Fair Lending call. 3. A credit union rolling out a special-purpose credit program already contained an exception rate twice as high for one group after credit controls before mortgage pricing residual by prohibited-basis group arrived; no new Examination and Notices path. 4. Provenance on mortgage pricing residual by prohibited-basis group after an exception rate twice as high for one group after credit controls is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

ANALYSIS REQUIRED 1. Check HMDA coding and underwriting policy against pricing disparities are justified. 2. Compare mortgage pricing residual by prohibited-basis group to similarly situated files, second-review notes, and reason codes after an exception rate twice as high for one group after credit controls. 3. Flag any disparate-impact table second-review underwriter cannot explain from mortgage pricing residual by prohibited-basis group. 4. For this Fair Lending Examination and Notices file, read mortgage pricing residual by prohibited-basis group against an exception rate twice as high for one group after credit controls and write the one fact that would move pricing disparities are justified for second-review underwriter.

RECOMMENDATION Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Examination and Notices packet (mortgage pricing residual by prohibited-basis group after an exception rate twice as high for one group after credit controls). The follow-on Examination and Notices action is what second-review underwriter does next: implement the option, assign an owner, and log the missing fact.