Assess whether HMDA data can be relied on for the exam (4a338d)

Situation

In a manufactured-housing lender with dealer-originated files, adverse-action notice principal-reason sample is the evidence after an underwriter chat that used coded language. Community-development lender has to pick Remove access or reverse the item or Temporary compensating control for this Fair Lending Examination and Notices close using adverse-action notice principal-reason sample.

Decision

Community-development lender 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 adverse-action notice principal-reason sample after an underwriter chat that used coded language.

Hypotheses to test

• An underwriter chat that used coded language is noise around an already-controlled Examination and Notices process in a manufactured-housing lender with dealer-originated files, given adverse-action notice principal-reason sample.
• An underwriter chat that used coded language is the event in adverse-action notice principal-reason sample that forces Remove access or reverse the item for community-development lender under Fair Lending.
• Adverse-action notice principal-reason sample shows a one-file miss after an underwriter chat that used coded language, not a Examination and Notices program failure.
• Adverse-action notice principal-reason sample cannot decide HMDA data can be relied on 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

• Match the adverse-action language to the facts in adverse-action notice principal-reason sample.
• Check HMDA coding and underwriting policy against HMDA data can be relied on.
• Compare adverse-action notice principal-reason sample to similarly situated files, second-review notes, and reason codes after an underwriter chat that used coded language.
• For this Fair Lending Examination and Notices file, read adverse-action notice principal-reason sample against an underwriter chat that used coded language and write the one fact that would move HMDA data can be relied on for community-development lender.

Recommendation