Assess whether dealer overlays introduce prohibited steering (d24851)

Situation

A manufactured-housing lender with dealer-originated files cannot treat an underwriter chat that used coded language as color commentary on manufactured-housing dealer overlay notes. Exam-response coordinator must close dealer overlays introduce prohibited from that extract under Fair Lending / CRA and Special-Purpose Programs.

Decision

Exam-response coordinator 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 manufactured-housing dealer overlay notes after an underwriter chat that used coded language.

Hypotheses to test

• An underwriter chat that used coded language is noise around an already-controlled CRA and Special-Purpose Programs process in a manufactured-housing lender with dealer-originated files, given manufactured-housing dealer overlay notes.
• An underwriter chat that used coded language is the event in manufactured-housing dealer overlay notes that forces Remove access or reverse the item for exam-response coordinator under Fair Lending.
• Manufactured-housing dealer overlay notes shows a one-file miss after an underwriter chat that used coded language, not a CRA and Special-Purpose Programs program failure.
• Manufactured-housing dealer overlay notes cannot decide dealer overlays introduce prohibited yet after an underwriter chat that used coded language; hold is the only Fair Lending close a manufactured-housing lender with dealer-originated files can defend.

Analysis required

• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• Compare manufactured-housing dealer overlay notes 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 manufactured-housing dealer overlay notes.
• For this Fair Lending CRA and Special-Purpose Programs file, read manufactured-housing dealer overlay notes 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

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / CRA and Special-Purpose Programs packet (manufactured-housing dealer overlay notes after an underwriter chat that used coded language). Lead with the Fair Lending option manufactured-housing dealer overlay notes can support after an underwriter chat that used coded language, then the two facts that force it, then the Monday action for exam-response coordinator in a manufactured-housing lender with dealer-originated files.