OCC 97-2 Subject: HMDA - Instructions for Description: Guidance for Bankers Filing HMDA-LARs TO: Chief Executive Officers and Compliance Officers of all National Banks, Department and Division Heads, and all Examining Personnel. Attached are instructions for filing your Home Mortgage Disclosure Act (HMDA) data for 1996. All national banks subject to HMDA and their mortgage subsidiaries are required to send the completed transmittal sheet and the accompanying Home Mortgage Disclosure Act Loan Application Registers (HMDA-LARs) containing loan activity for 1996 to the Federal Reserve Board (FRB) by March 1, 1997. HMDA-LARs should be sent to the following address: Federal Reserve Board Attn: OCC HMDA Processing 1709 New York Ave., NW, 5th Floor Washington, DC 20006 Institutions that report more than 25 applications and loan entries on their HMDA-LAR are required to submit the data in an automated, machine-readable form. Those institutions with 25 or fewer applications may collect and report data in paper form. Institutions may obtain a copy of the Loan/Application Register Transmittal Sheet and the Form HMDA-LAR by contacting the OCC's Compliance Management Department at (202) 874-4446. Banks that filed HMDA data for 1995 have already been provided microcomputer software by the Federal Reserve to help them file their 1996 HMDA-LAR in machine-readable form. Banks subject to the reporting requirements of HMDA for calendar year 1996 that did not receive the Federal Reserve's microcomputer software may obtain a copy by contacting the FRB at (202) 452-2016. File Specifications and Format of Submissions To further assist you in filing your HMDA-LARs in machine-readable form, we have enclosed the FRB's 1996 file specifications for submission of pc diskette, magnetic tape, or cartridge containing HMDA-LARs. These specifications are unchanged from those provided to you last year. National banks and their majority-owned mortgage lending subsidiaries that want to submit to the FRB 1996 HMDA-LAR data on microcomputer disks or on tape or cartridge must submit data that meet these specifications. You are not required to use the FRB's software but the software used must meet these specifications. If it does not, the FRB will be unable to process the HMDA automated report. Also enclosed is a copy of the HMDA edits for the 1996 HMDA-LAR. They are also unchanged from 1995. This year, for the first time, you may file your HMDA-LAR electronically over the Internet. Institutions wishing to use this option should send the report to hmdasub@frb.gov. If you have questions about filing your HMDA-LAR electronically please contact the Federal Reserve Board's HMDA Assistance Line at (202) 452-2016. Review of CY 1996 HMDA-LAR for Accuracy Certain types of errors continue to occur frequently. Before submitting your HMDA-LAR make sure that your report does not contain the following errors: o Property location codes (MSA, state, county, and census tract) entered incorrectly. If you use census tract numbers from an appraiser, remember that you are responsible for the correctness of the numbers. o Respondent ID, agency code, or tax ID that are incorrect (or missing). o Entries that report monthly income, instead of gross annual income. (Also remember that you must round to the nearest thousand, and must truncate the last three digits; for example, a gross annual income of $29,500 would be reported as 30. The same rules apply to the reporting of loan amount.) o Entries that leave blank the "co-applicant race and sex" columns when there is no co-applicant (instead of entering the codes for "not applicable"). o Illegible HMDA-LARs filed in paper form. The instructions specify that paper-copy must be typewritten or computer printed. o Incorrect treatment of counteroffers. A counteroffer that is accepted by the applicant is reported as an origination for the amount of the loan actually granted. But if the applicant does not accept the lender's counteroffer, the transaction must be reported as a denial for the loan or amount originally requested. Do not report the transaction as withdrawn or approved but not accepted. o Failure to report transactions that involve multifamily dwellings. HMDA covers loans on all residential dwellings, regardless of the number of units and regardless of whether the property is owner-occupied. Thus, for example, a loan to purchase or to rehabilitate a 50-unit apartment building is to be reported under HMDA. o Failure to report the reasons for denial of a loan application. All national banks subject to the HMDA and the Fair Housing Home Loan Data System are required to record the reason(s) for denial on their HMDA-LARs for all applications for, and origination and purchases of, home purchase and home improvement loans. Questions about the collection and processing of HMDA data should be addressed to the FRB's HMDA Assistance Line at (202) 452-2016. Questions can also be addressed electronically to the Federal Reserve Board's Internet address hmdahelp@frb.gov. Questions about this issuance or HMDA's regulatory requirements should be addressed to the appropriate OCC district office or to the Compliance Management Department at (202) 874-4446. Bert A. Otto Acting Deputy Comptroller for Compliance Management January 7, 1997 Attachments