HMDA Data Scrubbing
When it comes to HMDA data scrubbing, lenders must be careful not to overlook details. HMDA compliance is crucial to ensuring accuracy in loan applications, and improper data scrubbing can cause delays in the review process or even require the re-doing of an HMDA LAR. Scrubbing of data should be done using spreadsheets, and a standardized process should be developed for this purpose. The frequency with which LRs are updated will determine how well HMDA data scrubbing processes are working. Click here to get more insights about the Regulatory Solutions concerning mortgages.
When it comes to HMDA data scrubbing, most institutions do not scrub data. HMDA stands for Health Insurance Portability and Accountability Act. By performing an HMDA data scrub, institutions can identify potential errors before submitting their application. HMDA data scrubbing can also identify address and geocoding errors. The information is then submitted to the agency to verify the data is accurate. During the submission, regular reviews should be performed to ensure that HMDA data scrubbing is done properly.
If your institution has not yet conducted HMDA data scrubbing, you should do it as soon as possible. Ideally, you will have completed the HMDA scrubbing process by the March 1 deadline. Larger institutions, however, may choose to complete HMDA data scrubbing quarterly. Larger institutions with 60,000 covered loans should conduct the HMDA scrubbing process every three months. The purpose of LR scrub is to verify whether the data in HMDA LAR matches the data in the loan file.
If you have completed the HMDA data scrubbing process, you'll want to implement a standardized methodology for collecting, reviewing, and reporting data. Make sure your processes are thorough and include the views of the examiner or auditor. Make sure everyone involved in the lending process understands Regulation C and their duties regarding timely collection and reporting of data. Using a standardized process is the key to avoiding risk and ensuring compliance with HMDA.
HMDA data integrity services from Grant Thornton are a time-efficient alternative to manual HMDA data scrubbing. Instead of cumbersome spreadsheet processes, a single eTool enables teams to collaborate with ease and produce a LAR file that is accurate and compliant. Grant Thornton's internal procedures for client acceptance and related services require the clearing of independence and conflicts of interest prior to using a HMDA data integrity service.
OCC Bulletin 2017-31 provides guidance on the FFIEC's HMDA Examiner Transaction Testing Guidelines. OCC examiners may require the bank to submit an amended HMDA LAR if a data field is incorrect. If you need assistance, contact Anders to discuss your unique situation and reporting requirements. You'll be glad you did. You won't regret it! You've come this far.
The HMDA has many requirements and regulations governing mortgage loan reporting. A bank must report mortgage loan data on the LAR each year. However, the definition of what constitutes a "clean" HMDA data scrubbing isn't entirely clear. This is where Regulatory Solutions can help. These independent HMDA audits are conducted off-site and remotely. The results are then reported on the HMDA website.
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