Assess whether HMDA data can be relied on for the exam (a495a0)

Situation

A CRA PE that called the assessment area too narrow put mortgage pricing residual by prohibited-basis group in front of community-development lender in a manufactured-housing lender with dealer-originated files. This Fair Lending / Examination and Notices close is HMDA data can be relied on 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

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 mortgage pricing residual by prohibited-basis group after a CRA PE that called the assessment area too narrow.

Hypotheses to test

• Mortgage pricing residual by prohibited-basis group reads as Remove access or reverse the item once a CRA PE that called the assessment area too narrow is lined up to the same Fair Lending population.
• Mortgage pricing residual by prohibited-basis group is closer to Temporary compensating control after a CRA PE that called the assessment area too narrow; Remove access or reverse the item would over-claim this Examination and Notices extract.
• Approve a documented exception is still live in mortgage pricing residual by prohibited-basis group for community-development lender in a manufactured-housing lender with dealer-originated files.
• Mortgage pricing residual by prohibited-basis group is missing the fact community-development lender needs after a CRA PE that called the assessment area too narrow; stop this Fair Lending close.

Analysis required

• Compare mortgage pricing residual by prohibited-basis group to similarly situated files, second-review notes, and reason codes after a CRA PE that called the assessment area too narrow.
• Flag any disparate-impact table community-development lender cannot explain from mortgage pricing residual by prohibited-basis group.
• Test a documented exception versus a pattern a manufactured-housing lender with dealer-originated files must defend.
• For this Fair Lending Examination and Notices file, read mortgage pricing residual by prohibited-basis group against a CRA PE that called the assessment area too narrow and write the one fact that would move HMDA data can be relied on for community-development lender.