Assess whether dealer overlays introduce prohibited steering (69e133)

Situation

Second-review underwriter in a credit union rolling out a special-purpose credit program has one working extract — mortgage pricing residual by prohibited-basis group — after a marketing mailer that skipped majority-minority tracts. If mortgage pricing residual by prohibited-basis group cannot support dealer overlays introduce prohibited, the honest Fair Lending output is hold.

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 a marketing mailer that skipped majority-minority tracts.

Hypotheses to test

• Authorize Remove access or reverse the item now; mortgage pricing residual by prohibited-basis group already has the discriminator after a marketing mailer that skipped majority-minority tracts.
• Keep Temporary compensating control in force until mortgage pricing residual by prohibited-basis group is completed after a marketing mailer that skipped majority-minority tracts for second-review underwriter.
• Treat mortgage pricing residual by prohibited-basis group as Approve a documented exception because both readings appear after a marketing mailer that skipped majority-minority tracts.
• Refuse a Fair Lending close: second-review underwriter does not have the page dealer overlays introduce prohibited turns on in mortgage pricing residual by prohibited-basis group.

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 a marketing mailer that skipped majority-minority tracts.
• Flag any disparate-impact table second-review underwriter cannot explain from mortgage pricing residual by prohibited-basis group.
• For this Fair Lending Examination and Notices file, read mortgage pricing residual by prohibited-basis group against a marketing mailer that skipped majority-minority tracts and write the one fact that would move dealer overlays introduce prohibited for second-review underwriter.

Recommendation