HMDA:

2019 Filing Changes and Concerns, Tips & TricksThe webinar will begin at the top of the hour. You may download the presentation at:www.QuestSoft.com/HMDA2019

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Disclaimer!

The contents of this webinar are for informational purposes only and do not constitute legal advice.

This webinar and its associated material should not be regarded as a substitute for detailed advice regarding individual laws and regulations.

Transmission of this information is not intended to create -- and receipt does not constitute -- a lawyer-client relationship between you and QuestSoft or the participants of this webinar.

Furthermore, the opinions expressed here do not constitute legal advice and should not be construed as such.

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Loretta KirkwoodVice President, ComplianceQuestSoft Corporation Moderator

Brian ArnesenMarketing Manager

QuestSoft CorporationLeonard RyanPresidentQuestSoft Corporation

Today’s Panelists

General News for 2019 Submissions

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- CFPB Allowed QuestSoft to Beta Test- CFPB Site Far More Stable This Year

- Still have a few edits that will drive some submitters crazy- Changes for 2020 will help

- LOS Vendors Are Better This Year- Still some challenges especially for

S.2155 Partial Exemption filers

- QuestSoft Provides Software & Services to 2,701 Lenders- CFPB Data confirms that over 40% of the 5,686 institutions

used QuestSoft submitting over half of the total records processed last year.

- 20 of the 43 lenders required to submit quarterly reports in Year 2020 use us to submit their data.

Tips on Updating Your Compliance RELIEF Software

- Version 1.6 is the Year End Submission Update- Using any other version means you may be submitting with some errors

- Includes CFPB updates until year end- QuestSoft updates based on CFPB and LOS updates

- Standard Version Users That Did Not Install Summer Upgrade

- If you did not update to our multi-user version 1.5 during the summer, then plan an extra hour. Read the Installation Guide before installing to avoid conversion or computer migration issues.

- Users of Fair Lending RELIEF and CRA RELIEF- There are additional data downloads thanks to efficiency enhancements

and the FRB’s very unusual late release (December 18) of 2018 CRA market data.

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Popular Customer Support Topics and Questions

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Audience Poll

When Do You Plan to Submit Your 2019 HMDA Data?

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HMDA Filing Platform

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• Submission – March 2nd

• Registration• Do NOT create a new account - if you registered in 2018, use the same credentials• If new contact/user, create a new account

https://hmdahelp.consumerfinance.gov/accounthelp/• Verification email will come from noreply@cfpb.gov – make sure it’s not blocked!

• Upload Data• Data testing – beta site is still open http://ffiec.beta.cfpb.gov/filing/• White list – ffiec.cfpb.gov, ffiec-auth.cfpb.gov, ffiec-api.cfpb.gov, ffiec.beta.cfpb.gov• Do not close the browser while the file is uploading• Upload data issues - log out, clear browser’s cache, log back in• “Very large files can take a day to fully load”

HMDA Filing Platform

• Login or Create an Account• Upload HMDA Data in Pipe Delimited Text File

• Checks Formatting • Test Now!

• System will Identify Errors Immediately• Syntactical, Validity, Quality, Macro• Errors will Need to be Corrected at the Source Level • Then, Upload a Corrected Text File

• Authorized Representative Must Certify Data• Click Submit

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HMDA Filing Platform

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Tips … Browser Recommendations

QuestSoft Tested the Following Browsers during our 2019 Beta Test period:

Google Chrome – Still the bestMicrosoft Edge – Works in most cases – satisfactoryInternet Explorer – Much better than last yearFirefox – Seems to work well for our customersApple Safari – Did Not Test

Good News:Larger files of 50,000 records plus seem to submit without timing out as they did last year.

However, we still recommend submission during non-peak hours and a week before the deadline, if possible.

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Tips … Legal Entity Identifier (LEI)

• HMDA Panel• Institution name pulled from GLEIF using reported LEI• Reflects the current GLEIF institution name

• Institution Name Change• Annual renewal of LEI by issuing organization – CONFIRM!• NOTIFY issuing organization of reference data changes

No spaces or special characters!

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Tip … Agency Code = Primary Regulator

• Consumer Financial Protection Bureau• Banks, thrifts, credit unions > $10 bn assets + affiliates

• Banks• Office of the Comptroller of the Currency (OCC)• Federal Reserve System (FRS)• Federal Deposit Insurance Corporation (FDIC)

• Credit Unions• National Credit Union Administration (NCUA)

• Non- Depository Institutions• U.S. Department of Housing and Urban Development (HUD)

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Audience Poll

• Have you• Registered on the CFPB site?• Verified your sign on?• Reviewed your transmittal data?

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Common Issues

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• Application vs. Action Date• # Days to decision - logical?

• Applicant Demographics• Visual Observation

vs. Method of Application

• Age• Age vs. Date of Birth

• Denial Reasons• Credit data

S.2155 Partial Exemption

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• Insured depository institutions and credit unions ONLY• ORIGINATED fewer than 500 loans in “each” of the two (2) preceding calendar years –

separate tests:• Closed-End Mortgage Loans • Open-End Lines of Credit

• Data Fields• 110 Total• 57 Required • 53 Exempt / Optional

View of a Record with Exemptions Applied Features:

- Exempt View or Data View allows you to view for submission value or for use with fair lending or other analysis.

- In Exempt View, exempted fields display submitted value vs. actual value.

- NULI replaces ULI and uses Application/Loan No. unless you select ULI to voluntarily report.

- CFPB HMDA Error Codes removed for exempted fields.

S.2155 Exemption Reminders

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Importing With a S.2155 Partial Exemption

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Our Advice to Customers and Vendors:

- Please have your LOS/POS/Doc Vendor export EVERYTHING to us as they would a non-exempt lender.

Reasons:- You will not be able to change exemption selections prior to

submitting based on analysis if the vendor export is restricted.- Exemption codes for fields such as Property Address, City and Zip

Code will cancel out your ability to geocode, research or re-verifythe accuracy of your geocoding.

- Automation and analysis will be restricted.- If we receive data in some fields and exempt codes in others,

that helps identify internal issues.- You will not be able to accommodate regulator requests or

perform an accurate fair lending self-analysis if data is restricted.

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• Quarterly Reporting• Edits

• New• Modified• Removed

Looking Ahead

Quarterly Reporting

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• Lenders that reported at least 60,000 applications in 2019 (excluding purchased loans)• Supplemental Guide for Quarterly Filers

https://s3.amazonaws.com/cfpb-hmda-public/prod/help/supplemental-guide-for-quarterly-filers.pdf

2020 Validity Edits

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• New • V716 Invalid Property Location reported. The reported State and County are not a valid

combination. If neither State nor County were reported as NA, then the County must be located.

• V717 The required format for the Contact Person’s email address is name@example.com, and cannot be left blank.

2020 Quality Edits

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• New• Q648 Action = 1,2,3,4,5,7 or 8 and ULI first 20 characters don't match the LEI• Q649_1 Credit score of applicant <> 7777, 8888 or 1111, and not between 300 and 900• Q649_2 Credit score of co-applicant <> 7777, 8888, 9999 or 1111, and not between 300 and 900• Q650 Interest rate >0 and <0.5 , may indicate a misplaced decimal point• Q651 CLTV>0 and <1 , may indicate a misplaced decimal point• Q652 DTI >0 and <1 , may indicate a misplaced decimal point• Q653_1 Action = 1, 2 or 8 and CLTV not between 0 and 250• Q653_2 Action = 3, 4, 5, 6 or 7 and CLTV not between 0 and 1,000• Q654 Income > $5,000 and Action = 1, 2 or 8 and DTI not between 0 and 80

• Modified• Q606 Income greater than or equal to $10 million (previously $3 million)• Q614_1 Age of Applicant not between 18 and 100• Q614_2 Age of Co-Applicant not between 18 and 100• Q617 Loan type = 1, CLTV should generally be greater than the LTV (calculated by CFPB)

Applied to Conventional loans ONLY! Woo hoo! • Removed

• Q604 – Property location (Invalid State and County combination) - moved to validity edit

CFPB Resources

• 2019 Submission - HMDA Filing Platformhttps://ffiec.cfpb.gov/filing/2019/

• 2019 Registration / Correctionshttps://hmdahelp.consumerfinance.gov/accounthelp/

• 2019 Submission FAQshttps://ffiec.cfpb.gov/documentation/2019/filing-faq/

• Filing Instructions Guide (FIG)https://s3.amazonaws.com/cfpb-hmda-public/prod/help/2019-hmda-fig.pdf

• Toolshttps://ffiec.cfpb.gov/tools/

• Knowledgebase (searchable)https://hmdahelp.consumerfinance.gov/knowledgebase/s/

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QuestSoft Resources – HMDA HQ

• Submission Centralhttps://www.questsoft.com/hmda-hq/submission-central

• Submission Instructionshttps://www.questsoft.com/docs/default-source/default-document-library/pdfs/2019-hmda-relief-submission-instructions.pdf

• Prior Webinars

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Recent Compliance Webinar Recordings

December 3, 2019HMDA and Data Integrity: Do This, Not That!

October 9, 2019Fair Lending: How to Win Friends and Impress Examiners

QuestSoft Resources – Installation Instructions

• Installation Instructions https://questsoft.com/help/relief/index.htm#t=Installation_Guide%2FOverview.htm

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Post Submission - Examination Issues

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• HMDA Data Integrity• Partial Exemption –

Data is still requested!• New Data = New Analysis

• Age• Credit Data• Business Purpose• Reverse Mortgages

Features Designed to Help Submit Data More Accurately

Use LEI Database List to verify Purchase Loans

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Testing/StatisticsDo the numbers make sense and look accurate?

Group Edits

Correctly Applied This Saves Hours of Work

GeocodingAudit Summary provides information on records that have less than stellar accuracy indicators.

LEI Database

QuestSoft HMDA Supplemental Products

• Launched spring 2019• 108 Active lenders• 143 Lenders looking so far to purchase in 2020

• Features Not in ANY system on the market• Utilizes data from HMDA RELIEF – no importing of data• Reports feature interactive tool that Instantly displays records of concern• Parity reports identify the number of applications needed to pair to

demographics and peers• Superior documentation for exam preparation• Peer mapping shows strengths and weaknesses of competition

• Integrated into many popular systems:• Encompass, Calyx Point, Calyx Path, LendingQB, OpenClose

Origence, Wipro Gallagher, Black Knight Empower, Byte, PowerLender, RemoteLender, etc.

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QuestSoft Investments For 2020

• Fair Lending RELIEF- New Module for Non-HMDA Lending

- Spring 2020Preorder Pricing Now

- Instant HMDA - More LOS Integrations- Geocoding - Expansion for Tribal Lands

- A Word on CFPB Geocoding- Module Enhancements

- HMDA RELIEF- Data Integrity Reports

- CRA RELIEF- Enhance Reports and Features

- NMLS MCR- NMLS Database Integration

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- Expanded Service Options- HMDA Pro / Enterprise

- User Sign In Enhancements

- Features requested by large volume lenders

QuestSoft Investments For 2020 (continued)

- NEW: Instant 4506- 15 Minute Turnaround on IRS

Transcripts starting in Spring 2020

- Ellie Mae Encompass Integration

- Exclusive Supplier for IDS- Esigned with Disclosure Package

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BeSmarteeByte SoftwareCalyx SoftwareEllie Mae EncompassFICSFinastraISGNLPS EmpowerLendingPadLendingQBMemberCloseMortgage BuilderMortgageFlex SystemsOpenCloseProLender

Lending Compliance & Risk Management Conference

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Learn more and sign up to receive notifications for when registration opens: http://www.questsoft.com/lcrmc

Sailing Through Compliance

You can enter your question in the“Questions” section of the GoToWebinar control panel.

For information on products referenced

during this presentation, contact QuestSoft at

800-575-4632 option 1 or visit www.QuestSoft.com

Questions?

Leonard RyanPresidentQuestSoft Corporation(949) 614-8950Leonard.Ryan@QuestSoft.comhttps://www.QuestSoft.com

Loretta KirkwoodVice President, ComplianceQuestSoft Corporation(949) 614-8957Loretta.Kirkwood@QuestSoft.comhttps://www.QuestSoft.com

Now it’s time to make compliance relaxingFor more information on solutions, call (800) 575-4632 option 1or visit us at www.QuestSoft.com

Thanks for joining us today!

You can download this presentation at:www.QuestSoft.com/HMDA2019