HMDA Procedure - CMG Financialdocs.cmgfi.com/correspondent/HMDA-procedure.pdf · As outlined in the HMDA Rule, CMG is reporting N/A if the loan is closed for incompleteness or the

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017

DOCUMENT OWNER: COMPLIANCE

1

Corporate Procedure

Overview HMDA and Regulation C require lenders to collect, record, report, and disclose data about their mortgage lending activity.

The following procedure identifies what data points are required and how CMG is collecting them.

Contents Effective Dates ............................................................................................................................................................... 2

Covered Transactions .................................................................................................................................................... 2

Applicant Information.................................................................................................................................................... 3

Age ................................................................................................................................... 3

Ethnicity, Race, Gender ............................................................................................................ 3

Property Information ...................................................................................................................................................... 4

Lien Status ........................................................................................................................... 4

Construction Method ............................................................................................................... 4

Property Address and Location .................................................................................................... 5

Property Value ...................................................................................................................... 5

Occupancy Type..................................................................................................................... 5

Total Units ........................................................................................................................... 6

Manufactured Home Secured Property Type ..................................................................................... 6

Manufactured Home Land Property Interest ..................................................................................... 6

Multifamily Affordable Units....................................................................................................... 7

Loan Information and Features ..................................................................................................................................... 7

Application Date .................................................................................................................... 7

Preapproval Request ............................................................................................................... 7

Loan Amount ........................................................................................................................ 8

Loan Purpose ........................................................................................................................ 8

Loan Term ........................................................................................................................... 9

Loan Type............................................................................................................................ 9

Introductory Rate Period ........................................................................................................... 9

Non-Amortizing Features .......................................................................................................... 10

Prepayment Penalty Term ........................................................................................................ 10

Reverse Mortgage .................................................................................................................. 10

Open-End Line of Credit .......................................................................................................... 10

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


2

Corporate Procedure

Business or Commercial Purpose ................................................................................................. 10

Universal Loan Identifier .......................................................................................................... 11

MLO NMLSR Identifier.............................................................................................................. 12

Application Channel ............................................................................................................... 12

Pricing Information ........................................................................................................................................................13

Interest Rate ....................................................................................................................... 13

Closing Disclosure Fields .......................................................................................................... 13

Rate Spread ........................................................................................................................ 16

HOEPA Status ....................................................................................................................... 16

Underwriting Information ..............................................................................................................................................16

Automated Underwriting System ................................................................................................. 16

Income .............................................................................................................................. 17

Credit Score and Scoring Model .................................................................................................. 17

DTI Ratio ............................................................................................................................ 18

Combined LTV Ratio ............................................................................................................... 18

Action Taken and Action Taken Date ............................................................................................ 18

Reason for Denial .................................................................................................................. 19

Type of Purchaser.................................................................................................................. 19

Other Rescources .........................................................................................................................................................20

Effective Dates The expanded demographic information for ethnicity and race is required on applications dated 1/1/2018 and after.

The rest of the data points outlined below are required on loans with final action dates on 1/1/2018 and after. The final

actions are:

Retail and Wholesale: Funded, Withdrawn, Approved Not Accepted, Declined and Canceled for Incompleteness

Mini-Correspondent (aka Select Partner): Approved Not Accepted, Declined and Purchased

Correspondent: Purchased

Covered Transactions CMG is required to report all data points on loans where CMG makes the credit decision. This means CMG must report all

data points on all Retail, Wholesale and Mini-Correspondent (Mini-Corr) loans. Mini-Corr loans are only reported if the

loan is approved or denied by CMG. If CMG is unable to make a credit decision on a Mini-Corr loan, then CMG will not

report the loan. CMG is also required to report Correspondent purchased loans. Many, but not all, data points are required

on Correspondent purchased loans.

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


3

Corporate Procedure

Applicant Information

Age The applicant’s age is derived from the date of birth provided on the application. If there are co-applicants, CMG is only

required to report the age of the first co-applicant on the application.

Retail, Wholesale, Mini-Corr The age is automatically calculated based on the date of birth on the application.

Correspondent Age is not required to be reported on purchased loans.

Ethnicity, Race, Gender Effective on applications dated 1/1/2018 and after, the expanded demographic information is required. New requirements

include the addition of subcategories for ethnicity and race and reporting whether the information was collected by visual

observation or surname. If there are co-applicants, CMG is only required to report the ethnicity, race and gender of the

first co-applicant.

The loan originator is required is ask an applicant for ethnicity, race and gender information but cannot require the

applicant to provide it. The applicant is required to be informed that: (1) federal law requires this information to be

collected in order to protect consumers and to monitor compliance with federal statutes that prohibit discrimination against

applicants on these bases; and (2) if the information is not provided where the application is taken in person, the loan

originator is required to note the information on the basis of visual observation or surname.

The applicant must have the option to self-identify using any of the aggregate categories and disaggregate subcategories.

CMG is required to report the information exactly as completed by the applicant.

Ethnicity: There are two aggregate ethnicity categories: Hispanic or Latino; and Not Hispanic or Latino. If an

applicant selects Hispanic or Latino, the applicant may also select up to four ethnicity subcategories: Mexican;

Puerto Rican; Cuban; and Other Hispanic or Latino. If an applicant selects the Other Hispanic or Latino ethnicity

subcategory, the applicant may also provide a particular Hispanic or Latino ethnicity not listed in the standard

subcategories.

Race: There are five aggregate race categories: American Indian or Alaska Native; Asian; Black or African

American; Native Hawaiian or Other Pacific Islander; and White. The Asian race aggregate category has the

following seven subcategories: Asian Indian; Chinese, Filipino; Japanese; Korean; Vietnamese; and Other Asian.

The Native Hawaiian or Other Pacific Islander race aggregate category has the following four subcategories:

Native Hawaiian; Guamanian or Chamorro; Samoan; and Other Pacific Islander. If an applicant selects the Other

Asian race subcategory or the Other Pacific Islander race subcategory, the applicant may also provide a particular

Other Asian or Other Pacific Islander race not listed in the standard subcategories. If an applicant selects

American Indian or Alaska Native, the applicant may provide the name of enrolled or principal tribe.

Gender: The categories remain the same as male or female, however an applicant can self-identify as both male

and female.

Face-to-Face Application: If the applicant chooses not to provide the information when the application is taken face-to-

face (including electronically with a video component), the loan originator is required to collect based on visual

observation or surname. When collected based on visual observation or surname, only the aggregate categories apply ,

which means the loan originator cannot pick any of the disaggregate subcategories.

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


4

Corporate Procedure

Note: If the applicant begins the application by mail, internet or telephone and does not provide the information,

however the applicant meets with the loan originator to finish the application in person, the loan originator is

required to request the information again and if not provided, then collect the information based on visual

observation or surname.

The application form generated by CMG’s document vendor is automatically including the new Demographic Information

Addendum for applications dated 1/1/2018 and after.

Retail Face-to-Face: Loan Officer is required to request the information and if not provided, then collect based on visual

observation or surname as outlined above.

Telephone: Loan Officer is required to orally state the information from the Demographic Information Addendum and allow

the applicant to self-identify using any of the aggregate categories and disaggregate subcategories.

Fax/Mail: Loan Officer is required to enter the information into the loan origination system exactly as completed by the

applicant on the application form, even if the applicant misspelled anything entered into the “Other” or “Tribe” subcategory.

Internet: CMG’s online application was updated in December 2017 to include the new demographic information. Loan

Officer is required to upload the loan information to the loan origination system without making any alterations.

Wholesale, Mini-Corr

The Broker and Select Partner are responsible for collecting the demographic information from the applicants as outlined

above. The loan portal is programmed to require specific information depending on how the Broker or Select Partner

states the application was taken and how the information was collected.

Correspondent Ethnicity, Race and Gender are not required to be reported on purchased loans.

Property Information

Lien Status CMG is required to report if the loan is a first or subordinate lien.

Retail, Wholesale, Mini-Corr, Correspondent CMG only originates and purchases first mortgage liens that are HMDA reportable. The lien status is being defaulted

based on loan purpose.

Construction Method CMG is required to report the construction method of either site-built or manufactured home.

Manufactured home means a residential structure that satisfies the HUD standards for manufactured homes. A

manufactured home will generally bear a HUD Certification Label and data plate noting compliance with the

federal standards.

Site-built refers to any construction method that does not meet the definition of manufactured home. Modular

homes (regardless of whether they are on-frame or off-frame) or dwellings built using prefabricated components

assembled at the dwelling’s permanent site should be reported as site-built.

Retail, Wholesale, Mini-Corr, Correspondent The Construction Method is being defaulted based on Property Type being either a Manufactured Home type or not.

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


5

Corporate Procedure

Property Address and Location CMG is required to report the property address and data about the location of the property. Property address consists of

the street address, city and ZIP. Property location consists of the state, county and if applicable, census tract.

Retail Loan Officer is required to enter the street address, city, county, state and ZIP into the system once provided by the

applicant.

If an application is denied prior to an address being provided or a preapproved application is denied or moves to approved

not accepted, then the property address is automatically reported as N/A.

Wholesale, Mini-Corr, Correspondent Broker, Select Partner or Correspondent seller is required to provide the street address, city, county, state and ZIP.

Property Value CMG is required to report the property value relied on for calculating the loan-to-value (LTV) ratio. On a purchase

transaction, the LTV is calculated using the lesser of the Purchase Price and Appraised Value. On a refinance transaction,

the LTV is calculated using the Estimated Value unless an Appraised Value has been received from an appraisal or other

valuation of the property.

Note: When multiple property valuations are received, the “Appraised Value” field must only reflect the value

relied on to make the credit decision. For example, if CMG obtains an appraisal report, a second appraisal report

and an automated valuation model report that reflect different values, the Underwriter only enters the value relied

on to make the final credit decision in the “Appraised Value” field.

As outlined in the HMDA Rule, CMG is reporting N/A if the loan is closed for incompleteness or the application was

withdrawn before a credit decision was made even if CMG had obtained a property value.

Retail, Wholesale, Mini-Corr The Property Value is being automatically determined as outlined above.

Correspondent Although not directly addressed in the HMDA Rule, since CMG does not make the credit decision and thus does not rely

on the property value, CMG is reporting N/A.

Occupancy Type CMG is required to report if the property is a principal residence, a second residence or an investment property.

Principal residence is a property that is or will be used as the applicant’s principal residence. An applicant can

only have one principal residence at a time. If the applicant buys or builds a new dwelling that will become the

applicant’s principal residence within a year or upon completion of construction, the new dwelling is considered

the principal residence.

Second residence is a property that is or will be occupied by the applicant for a portion of the year and is not the

applicant’s principal residence. For example, if a couple occupies a property near their place of employment on

weekdays, but the couple returns to their principal residence on weekends, the property near the couple’s place of

employment is a second residence.

Investment property is a property the applicant does not or will not occupy. For example, if a person purchases a

property, does not occupy the property, and either generates income by renting the property or intends to

generate income by selling the property, the property is an investment property. Even if the applicant does not

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


6

Corporate Procedure

consider the property as owned for investment purposes, if the applicant does not or will not occupy the property,

then it is an investment property.

Retail, Wholesale, Mini-Corr The Occupancy Type is being defaulted based on the “Occupancy Type” field in Byte.

Correspondent The Correspondent seller is responsible for providing the occupancy type.

Note: CMG may default to principal residence unless loan documents indicate the property will not be occupied as

a principal residence.

Total Units CMG is required to report the total number of dwelling units.

Note: Accessory Dwelling Units may be included in the total units when classified by the appraiser or jurisdiction

as an additional unit. Underwriting should refer to credit guidelines for more information.

Retail, Wholesale, Mini-Corr Underwriting is responsible for validating the total number of dwelling units is accurate based on the appraisal or other

documentation in the loan file.

If final action occurs on a loan prior to an appraisal or other documentation being received that identifies the number of

units, CMG may assume the property consists of one dwelling unit unless the applicant provides other information.

Correspondent The total units is obtained from the appraisal or other documentation provided by the Correspondent seller in the loan file.

Manufactured Home Secured Property Type For a manufactured home, CMG is required to report if the loan is or would have been secured by a manufactured home

and land or just the manufactured home without land.

Retail, Wholesale, Mini-Corr, Correspondent CMG only originates and purchases loans secured by both the manufactured home and land. The Manufactured Home

Secured Property Type is being defaulted to manufactured home and land when the Property Type is manufactured.

Manufactured Home Land Property Interest For a manufactured home, CMG is required to report if the applicant owns or leases the land on which the manufactured

home is or will be located. CMG only permits the following:

Direct Ownership: The applicant has direct ownership interest in the loan on which the dwelling is located or the

applicant has more than a possessory real property interest in the land, such as fee simple ownership.

Paid Leasehold: The applicant has a written lease for the lot where the dwelling is located that specifies rent

payments. Paid Leasehold is only permitted by exception from Corporate Credit.

Retail, Wholesale, Mini-Corr The Manufactured Home Land Property Interest field in the Subject Property screen must be completed.

Correspondent CMG only purchases Direct Ownership. In Byte, the Manufactured Home Land Property Interest field in the Subject

Property screen must be completed.

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


7

Corporate Procedure

Note: If the loan is purchased in the Byte loan origination system, Paid Leasehold may be reviewed for exception.

Multifamily Affordable Units If the property is a multifamily dwelling, CMG is required to report the total number of dwelling units that are income-

restricted under federal, state or local affordable housing programs.

Retail, Wholesale, Mini-Corr, Correspondent CMG does not originate or purchase loans secured by a multifamily dwelling, so this is being defaulted to N/A.

Loan Information and Features

Application Date CMG is required to report the application date.

Reinstated Application: If, within the same quarter, an applicant asks CMG to reinstate a counteroffer that the applicant

previously did not accept (or asks CMG to reconsider an application that was denied, withdrawn, or closed for

incompleteness) and the loan is reinstated, then the application date is the original application date. If the loan is not

reinstated and is treated as a new transaction, then the application date is the date of the request.

Note: Loan cannot be reinstated if declined and the adverse action notice has been delivered to the applicant.

Loan also cannot be reinstated if it is not within the same quarter.

Retail The application date is the date the Loan Officer receives all six pieces as defined in the TRID Rule – borrower’s name,

borrower’s income, borrower’s Social Security number to obtain a credit report, property address, estimate of the value of

the property and loan amount sought. The system automatically inputs the application date when the six pieces are

entered. First mortgage equity lines, the All in One Loans, are treated the same.

Wholesale, Mini-Corr The application date is the date shown on the application form provided by the Broker or Select Partner.

For first mortgage equity lines, the All in One Loans, the application date is the date the Broker submits documentation for

underwriting review. The system automatically inputs the application date when the loan is moved to File Received status.

Correspondent The application date is not required to be reported on purchased loans.

Preapproval Request CMG is required to report whether the loan involved a request for preapproval of a home purchase loan under a

preapproval program.

Retail CMG only offers HMDA-reportable preapprovals in the Retail channel. On a preapproval request, the Underwriter is

required to complete a comprehensive review of the applicant’s creditworthiness, including verification of income and

asset documentation.

The preapproval letter cannot be subject to conditions other than the following:

Conditions that require the identification of a suitable property;

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


8

Corporate Procedure

Conditions that require that no material change has occurred in the applicant’s financial condition or

creditworthiness prior to closing; and

Limited conditions that are not related to the financial condition or creditworthiness of the applicant that the

financial institution ordinarily attaches to a traditional home mortgage application.

o Examples include requiring an acceptable title insurance binder or a certificate indicating clear termite

inspection, and, in the case where the applicant plans to use the proceeds from the sale of the applicant’s

present home to purchase a new home, a settlement statement showing adequate proceeds from the

sale of the present home.

If the Underwriter is unable to complete a comprehensive review as outlined above, then the loan cannot be moved to the

Preapproved status.

Wholesale, Mini-Corr CMG does not have a HMDA preapproval program in the Wholesale channel since no written commitment is provided to

the applicant.

Correspondent Preapproval not requested is being defaulted on all purchased loans.

Loan Amount CMG is required to report the loan amount.

Retail, Wholesale, Mini-Corr The loan amount is the total note loan amount, except for first mortgage equity lines, the All in One Loans, where the loan

amount is the amount of credit available to the borrower on the credit agreement, which is the same field in Byte.

Counteroffers: If a counteroffer was provided to the applicant for a different amount that the original application and the

applicant does not accept or fails to respond, the loan amount must be changed back to the original amount before the

loan is put into a final action status.

Correspondent For purchased loans, the loan amount reported is the unpaid principal balance at the time of purchase.

Loan Purpose CMG is required to report if the loan purpose is Home Purchase, Home Improvement, Refinancing, Cash-Out Refinancing

or Other Purpose.

Home Purchase: Loan is for the purpose, in whole or in part, of purchasing a dwelling.

Home Improvement: Loan is for the purpose, in whole or in part, of repairing, rehabilitating, remodeling or

improving a dwelling or the real property on which the dwelling is located.

Refinancing: Loan in which a new, dwelling-secured debt obligation satisfies and replaces an existing, dwelling-

secured debt obligation by the same borrower.

Cash-Out Refinancing: Loan is considered cash out per credit underwriting and investor guidelines.

Other: If the loan doesn’t meet any of the above purposes, then CMG must report the purpose as Other.

Multiple Purposes: When multiple loan purposes apply, a waterfall approach applies. First, if any portion of the loan

proceeds will be for a home purchase, then the purpose is Home Purchase. If none of the proceeds will be for a home

purchase and the loan is a refinance, then the loan is reported as Refinancing or Cash-Out Refinancing, as appropriate. If

neither a home purchase nor refinancing and a portion of the loan proceeds will be used for home improvement, then the

loan is reported as Home Improvement. If none of the above apply, then the loan purpose is Other.

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


9

Corporate Procedure

Retail, Wholesale, Mini-Corr, Correspondent The HMDA loan purpose is being automatically selected based on the following criteria:

If the Loan Purpose field on the Home screen is Purchase or ConstructionPerm = Home Purchase

If the Loan Purpose field is Refinance and the Refinance Type field is Cash Out/Debt Consolidat ion, Cash

Out/Home Improvement, Cash Out/Other, Cash Out (FHA) or Other (VA) = Cash-Out Refinancing

If the Loan Purpose field is Refinance and the Refinance Type field is not one of the above Cash Out options =

Refinancing

If the Improvements field on page 1 of the 1003 is Made and the Cost field is greater than 0 = Home Improvement

If the Loan Purpose field is Construction = Home Improvement

If none of the above apply = Other

Loan Term CMG is required to report the loan term as the scheduled number of months after which the legal obligation will mature or

terminate. For the first mortgage equity line, the All in One Loan, CMG reports the number of months from origination until

the account termination date, including both the draw and repayment period.

Retail, Wholesale, Mini-Corr The Loan Term is being automatically calculated based on the number of periods on the amortization schedule. For All in

One Loans where the Mortgage Type field is HELOC, the Loan Term is automatically based on the HELOC Draw Access

Term plus the HELOC Repayment Term.

Correspondent For purchased loans, CMG must report the number of months after which the legal obligation matures measured from the

loan’s origination, not from when CMG purchased the loan. The Loan Term is being automatically calculated based on the

number of periods on the amortization schedule in the system.

Loan Type CMG is required to report the type of application: Conventional, FHA, VA or USDA.

Retail, Wholesale, Mini-Corr, Correspondent The Loan Type is being automatically selected based on the Mortgage Type field, which is populated by the loan program

chosen.

If Mortgage Type is FHA = FHA

If Mortgage Type if VA = VA

If Mortgage Type is RHS = RHS/FSA

If Mortgage Type is any selection besides the above = Conventional (not insured or guaranteed by FHA/ VA,

RHS or FSA)

Introductory Rate Period On adjustable rate loans, CMG is required to report the introductory rate period, which is the number of months from

closing until the first date the interest rate may change.

Retail, Wholesale, Mini-Corr, Correspondent The introductory rate period is automatically calculated by the system based on the amortization schedule that applies

due to the loan program chosen.

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


10

Corporate Procedure

Non-Amortizing Features CMG is required to report whether the contractual terms include any of the following non-amortizing features:

Balloon payment: payment that is more than two times a regular periodic payment

Interest-only payment: one or more of the periodic payments may be applied solely to accrued interest and not to

the loan principal

Negative amortization: minimum periodic payment that covers only a portion of the accrued interest, resulting in

payment of periodic payments that will result in an increase in the principal balance

Other non-amortizing feature: any other contractual term that would allow for payments other than fully amortizing

payments (which means a periodic payment of principal and interest that will fully repay the loan amount over the

loan term)

Retail, Wholesale, Mini-Corr, Correspondent CMG only originates and purchases one product with a non-amortizing feature, which is interest only. Interest Only

Payment is being automatically selected based on the amortization schedule identifying any payments that pays off only

the interest.

Prepayment Penalty Term CMG is required to report the term in months of any prepayment penalty.

Retail, Wholesale, Mini-Corr, Correspondent CMG does not originate or purchase any loans with prepayment penalties, so this is being defaulted to N/A.

Reverse Mortgage CMG is required to report whether or not the loan is for a reverse mortgage.

Retail CMG only brokers out reverse mortgages, so since CMG does not make the credit decision, these loans are not reported

under CMG.

Wholesale, Mini-Corr, Correspondent CMG does not originate or purchase any reverse mortgages, so this is defaulting to not a reverse mortgage.

Open-End Line of Credit CMG is required to report whether or not a loan is an open-end line of credit, which applies to CMG’s first mortgage equity

line, the All in One Loan.

Retail, Wholesale When the Mortgage Type is HELOC, the loan is reported as an open-end line of credit.

Mini-Corr, Correspondent CMG does not originate or purchase any All in One loans in Mini-Corr or Correspondent, so this is defaulting to not an

open-end line of credit.

Business or Commercial Purpose CMG is required to report whether or not a loan is primarily for a business or commercial purpose. The loan may be

identified as being primarily for business purpose if the Occupancy Type is Investment and the loan purpose is Purchase.

A Refinance of an Investment property may only be identified as being primarily for business purpose if the applicant

provides a letter of explanation confirming no cash out funds or home improvement funds are for personal use.

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


11

Corporate Procedure

Examples of investment property loans that may or may not be primarily for business purpose:

Rental Property:

o Business Purpose = The loan is for purchasing, improving or maintaining a rental property that is non-

owner occupied.

o Not Business Purpose = If the owner expects to occupy the property for more than 14 days during the

coming year, the property can no longer be considered non-owner occupied. For example, the owner

rents out the beach house all year except for one month where the owner occupies it while on vacation –

this is considered owner occupied and thus not primarily for business purpose.

Owner Occupied Rental Property: When the investment property includes 1 unit that is owner occupied, the rules

are slightly different –

o Business Purpose = The loan is for purchasing a rental property that contains more than 2 housing units

o Business Purpose = The loan is for improving or maintaining a rental property that contains more than 4

housing units.

Cash Out Refinance: How the cash out funds are used affects if it can be considered a business purpose –

o Business Purpose = Cash out funds are used to expand a business or improve the rental property.

o Not Business Purpose = When cash out funds are used for a personal purpose (e.g. paying off a credit

card, purchasing a car, etc.), the loan is no longer primarily for business purpose.

Retail, Wholesale, Mini-Corr, Correspondent Purchase: When the occupancy type is Investment and the loan purpose is Purchase, the system is checking the “Bus.”

field next to Occupancy Type on the Home screen to identify the loan as being primarily for a business purpose.

Refinance: If a loan is identified as being primarily for a business purpose as outlined above, the “Bus.” field next to

Occupancy Type on the Home screen needs to manually be checked.

Universal Loan Identifier CMG is required to assign and report a uniform loan identifier (ULI) to each loan. The ULI may contain up to 45

alphanumeric characters and must be constructed as follows:

Begin with the lender’s legal entity identifier (LEI), which is a unique 20-digit alphanumeric identifier,

Follow the LEI with up to 23 additional characters to identify the loan, and

End with a two-character check digit.

The ULI must not contain any information that could be used to directly identify the applicant, such as the applicant’s

name, date of birth, Social Security number, official government-issued driver’s license or identification number, alien

registration number, government passport number, or employer or taxpayer identification number.

The ULI is unique to each reported loan not only with the originating lender, but also across all institutions, which will al low

tracking of loans between entities.

Retail, Wholesale CMG is issuing the ULI on all applications.

Mini-Corr CMG only issues the ULI if CMG makes the credit decision. If the loan is withdrawn or denied by the Mini-Corr seller prior

to CMG making a credit decision, then the Mini-Corr seller is responsible for issuing the ULI (if the seller is a HMDA

reporter). If CMG is unable to approve or deny the loan due to a lack of information or documentation, CMG will not issue

the ULI. Only if CMG approves or denies the loan, will CMG issue a ULI.

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


12

Corporate Procedure

Correspondent If the loan was originated on or after 1/1/2018, the Correspondent seller is responsible for issuing the ULI and providing

that ULI to CMG.

CMG is validating the Correspondent seller’s ULI on each loan as follows:

CMG is collecting the LEI separately from each seller to validate the first 20 digits of the loan’s ULI is accurate

CMG is running the full ULI through a validation to ensure the check digits are accurate

If the loan was originated before 1/1/2018 but purchased by CMG on or after 1/1/2018, CMG is responsible for issuing the

ULI. Also, if the Correspondent seller is not a HMDA reporter, then CMG is responsible for issuing the ULI, however it is

not anticipated that any Correspondent seller is not a HMDA reporter.

MLO NMLSR Identifier CMG is required to report the mortgage loan originator’s National Mortgage Licensing System & Registry identifier

(NMLSR ID) for each application.

If more than one loan originator is associated with an application, CMG is required to report the NMLSR ID of the loan

originator with primary responsibility for the transaction as of the final action date. For example, if a loan originator leaves

the company while the loan is in process and the loan is transferred to another loan originator to complete the origination

activities, the new originator’s NMLSR ID is reported.

Retail The NMLSR ID of the Loan Officer assigned to the loan in the system is being reported. If the loan is transferred to

another Loan Officer or Branch Manager to complete the origination activities, the Loan Officer file assignment is required

to be updated in the system.

Wholesale, Mini-Corr The Broker or Select Partner is required to disclose the loan originator with primary responsibility for the loan transaction

on the application form. If the loan originator with primary responsibility changes during the loan transaction, the Broker or

Select Partner is required to notify CMG in order for the system to be updated.

Correspondent The Correspondent seller is required to disclose the loan originator with primary responsibility for the loan transaction at

the time of funding on the final application form and Closing Disclosure in order for CMG to identify the MLO NMLSR in

the system.

Application Channel CMG is required to report whether the application was submitted directly to CMG and whether the obligation was or would

have been initial payable to CMG.

Retail Submission of Application: If the Origination Channel is Retail or Brokered Out, then the default is Submitted Directly to

Your Institution.

Initially Payable to Your Institution: If the Origination Channel is Retail, then the default is Initially Payable to Your

Institution. (For Brokered Out, the default is Not Initially Payable to Your Institution.)

Wholesale, Mini-Corr Submission of Application: If the Origination Channel is Wholesale or Mini-Corr, then the default is Not Submitted Directly

to Your Institution.

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


13

Corporate Procedure

Initially Payable to Your Institution: If the Origination Channel is Wholesale, then the default is Initially Payable to Your

Institution. For Mini-Corr, the default is Not Initially Payable to Your Institution.

Correspondent Application channel information is not required to be reported on purchased loans.

Pricing Information

Interest Rate CMG is required to report the interest rate that was disclosed on the most recent Loan Estimate (LE) or Closing

Disclosure (CD) for approved and funded loans. For loans subject to the TRID Rule, the interest rate in the Loan Terms

table on page 1 of the most recent LE or CD is reported.

Example:

Retail, Wholesale The interest rate is automatically pulled from the disclosure log entry of the most recent LE or CD.

Mini-Corr, Correspondent The interest rate entered in the loan origination system is reported.

Closing Disclosure Fields For all loans subject to the TRID Rule, CMG is required to report the following fields from the most recent CD that was

delivered to the borrower within the same calendar year:

Origination Charges: borrower-paid at or before closing as disclosed on Line A of the Loan Costs table in the

Closing Costs Details on page 2 of the CD

Discount Points: disclosed on Line A.01 of the Loan Costs table in the Closing Costs Details on page 2 of the

CD

Total Loan Costs: disclosed on Line D of the Closing Costs Details on page 2 of the most recent CD.

o For loans that are subject to ATR requirements but not subject to the TRID Rule, CMG is required to

report the Total Points and Fees charged in connection with the loan, however CMG doesn’t currently

offer any loans that are subject to ATR and not subject to TRID.

Lender Credits: disclosed under Line J at the bottom of the Closing Cost Details on page 2 of the CD

These CD fields are required to be reported on all loans except loans are not originated or purchased and loans no t

subject to the TRID Rule (such as the All in One Loan or loans primarily for business purpose).

“Within the same calendar year” refers to the situation where the loan closes in one calendar year, however a Post

Consummation CD is required to be delivered in the next calendar year. For example, the loan closes December 20, 2018

and a Post Consummation CD is required to be delivered on January 4, 2019 to update the lend cure. Since the Post

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


14

Corporate Procedure

Consummation CD in January 2019 is not in the same calendar year, that lender credit value is not reported; instead the

value on the last CD delivered in December 2018 is reported.

Retail, Wholesale The CD fields are automatically pulled from the disclosure log entry of the most recent CD with an issue date within the

same calendar year.

Note: If, for any reason, a disclosure log entry is required without a corresponding CD being delivered to the

borrower, these CD fields in the disclosure log entry must be validated against the most recent CD that was

delivered to the borrower within the same calendar year.

Post Consummation CDs should be delivered to the borrower using the IDS integration to ensure there is a corresponding

disclosure log entry. If the CD needs to be mailed outside of the IDS integration, then a disclosure log entry must be

manually created and the required CD fields completed – see How to Complete the Disclosure Log Entry.

Mini-Corr, Correspondent A manual disclosure log entry is required to be completed on Mini-Corr or Correspondent loans in order to enter the CD

fields disclosed on the most recent CD with an issue date within the same calendar year.

Note: These CD fields are not required to be completed on investment purchases or refinances of investment

properties that are identified in the system as being primarily for a business purpose – see Business or

Commercial Purpose. (Reminder: the “Bus.” field on the Home screen must be checked if the investment loan is

primarily for a business purpose.)

Post Consummation CDs: If the Mini-Corr or Correspondent seller needs to deliver a Post Consummation CD within the

same calendar year, the disclosure log entry needs to be manually corrected or a new disclosure log entry needs to be

manually created to ensure the most recent CD disclosure log entry’s fields are the final accurate amount.

How to Review the CD

Origination Charges

Discount Points

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


15

Corporate Procedure

Total Loan Costs

Lender Credits

Note: This field does not include any amounts in the Paid by Others column even if those amounts are

specific lender credits.

How to Complete the Disclosure Log Entry In the Loan Estimate Page 1 screen, click on “Log Disclosure of LE.” Open the resulting disclosure log entry and change

the Form to “Closing Disclosure.” Complete the Lender Credit, Origination Charges, Discount Points, and Total Loan

Costs – Unrounded. For Mini-Corr loans only, also complete the APR field, which is needed for the Rate Spread.

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


16

Corporate Procedure

Rate Spread CMG is required to report the rate spread on all locked loans, which is the difference between the Annual Percentage

Rate (APR) and the Average Prime Offer Rate (APOR) for a comparable transaction as of the date the interest rate is set.

The rate spread is required on all funded loans and loans that were approved not accepted (including preapprovals that

were approved not accepted and open-end lines of credit) except for loans for investment properties that are primarily for

a business purpose.

The rate spread is not required on loans denied (including denied preapprovals), withdrawn, closed for incompleteness,

loans primarily for a business purpose and purchased loans.

Retail, Wholesale, Mini-Corr The APR is automatically pulled from the disclosure log entry for the most recent LE or CD. If there are no disclosure log

entries, the APR calculated by the system is reported. The APOR is automatically obtained by the system.

Mini-Corr On a purchased loan, the APR needs to be pulled from the most recent CD with an issue date within the same calendar

year and manually entered into a CD disclosure log entry – see How to Complete the Disclosure Log Entry.

If the loan is not being purchased (final action is either Approved not Accepted or Denied), CMG is reporting the APR as

calculated by the system since all costs are entered into the system for accurate cash to close figures for underwriting and

CMG may not have the recent LE or CD delivered to the borrower. The APOR is automatically obtained by the system.

Correspondent Rate spread is not required to be reported on purchased loans.

HOEPA Status CMG is required to report whether the loan is subject to the Home Ownership and Equity Protection Act of 1994 (HOEPA)

and then whether the loan is a high-cost mortgage.

Retail, Wholesale, Mini-Corr HOEPA status is automatically determined by the system depending on the results of the high cost mortgage test in the

Compliance screen.

Correspondent Since all costs are not entered in the loan origination system, the high cost mortgage test in the Compliance screen is not

accurate. CMG requires all loans to pass the HOEPA High Cost Mortgage threshold tests in ComplianceEase prior to

being eligible for purchase, so although the test details in the Compliance screen are not accurate, the passing result is

accurate.

Underwriting Information

Automated Underwriting System CMG is required to report the name of the automated underwriting system (AUS) utilized to evaluate the application and

the result generated by the AUS, if applicable. Even if the loan is manually underwritten, if an AUS was used at any point,

CMG is required to report it and the result.

Multiple Results: When CMG uses more than AUS or if the same AUS generates two or more results, there is a waterfall

approach to determine which AUS and result to report. First, determine whether the AUS matches the Loan Type reported

for the loan. If the AUS matches the Loan Type (e.g. Total Scorecard for an FHA loan), then determine whether only one

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


17

Corporate Procedure

result was obtained, and if only one, then report the AUS that matches the Loan Type and that result. If no AUS matches

the Loan Type or multiple results were obtained from the AUS that matches the Loan Type, determine whether an AUS

matches the purchaser, insurer or guarantor for the loan, and if it matches (e.g. Desktop Underwriter for Fannie Mae),

determine if only one result was obtained. If only one result, report that AUS and result obtained. If no AUS matches the

purchaser, insurer or guarantor or more than one result was obtained from an AUS that does match, report the result

obtained closest in time to the credit decision and the AUS that generated that result.

Note: The only situation where CMG runs multiple AUSs at the same time is when utilizing Total Scorecard which

runs behind Desktop Underwriter (DU) and Loan Prospector (LP), however clarification has been received that

Total Scorecard would be the AUS reported in this situation.

Retail, Wholesale, Mini-Corr The system is programmed to automatically select the AUS and result. Underwriting is required to run AUS through Byte,

or if run outside Byte, to ensure it is entered into the Underwriting screen.

Correspondent The AUS and result are not required to be reported on purchased loans.

Income CMG must report the gross annual income relied on in making the credit decision.

Examples: If CMG relies on an applicant’s salary to compute a debt-to-income ratio but also relies on the

applicant’s annual bonus to evaluate creditworthiness, CMG reports the salary and the bonus to the extent relied

upon. If CMG relies on only a portion of an applicant’s income in its determination, it only reports the portion of

income relied on. Similarly, if CMG, pursuant to credit and investor guidelines, does not rely on an applicant’s

commission income because it has been earned for less than 12 months, CMG does not include the applicant’s

commission income in the income reported.

For applications that are withdrawn or closed for incompleteness prior to a credit decision, CMG is required to report the

income that was relied on while processing the application. CMG is only reporting N/A for income when the loan program

does not require income verification and for employee loans.

Retail, Wholesale, Mini-Corr CMG Underwriters must only enter the income relied on in making the credit decision into the Monthly Income section of

the 1003 Page 2 screen. Any income not relied on for the credit decision needs to be removed.

Note: Reportable income does not include amounts in addition to income, such as amounts derived from

annuitization or depletion of an applicant’s assets, even if such amounts are considered in making a credit

decision, so these amounts cannot be entered as income in the system.

The Documentation Type field must be completed on all HMDA reportable loans.

Post Closing: If changes to the income are required post closing and AUS re-run, the underwriter must change the income

back to the amount used when the original credit decision was made. The system cannot reflect the post closing amount

since that was not the amount relied on for the credit decision.

Correspondent Income is not required to be reported on purchased loans.

Credit Score and Scoring Model CMG is required to report the credit score relied on in making the credit decision and the scoring model used.

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


18

Corporate Procedure

When multiple scores are obtained and/or multiple applicants with multiple scores, the credit score relied on in making the

credit decision is outlined in the credit underwriting guidelines.

Retail, Wholesale, Mini-Corr When credit scores are provided, CMG Underwriting always relies on the credit score in making a credit decision, even

when CMG denies an application based on other underwriting factors. The system is currently programmed to select the

middle score of the lowest scoring applicant.

Important Note: The loan programs offered by Deephaven require CMG to use the middle credit score of the

primary wage earner. Until Byte is updated to allow an override value for the credit score, these loans will require

a manual correction to the Credit Score Disclosure screen post closing to ensure the correct credit score is

reported for HMDA. The Underwriter is required to add a condition to the Loan Approval to document the credit

score utilized for the credit decision.

Correspondent The credit score and scoring model are not required to be reported on purchased loans.

DTI Ratio CMG is required to report the ratio of the applicant’s total monthly debt to the total monthly income (DTI Ratio) relied on

in making the credit decision.

Retail, Wholesale, Mini-Corr When the necessary information is provided to calculate the DTI Ratio, CMG Underwriting always relies on the DTI Ratio

in making a credit decision, even when CMG denies an application based on other underwriting factors. The system

automatically calculates the DTI Ratio.

Correspondent The DTI Ratio is not required to be reported on purchased loans.

Combined LTV Ratio CMG is required to report the ratio of the total amount of debt secured by the property to the value of the property (CLTV

Ratio) relied on in making the credit decision.

Retail, Wholesale, Mini-Corr CMG Underwriting always relies on the CLTV Ratio in making a credit decision, even when CMG denies an application

based on other underwriting factors. The system automatically calculates the CLTV Ratio.

Correspondent The CLTV Ratio is not required to be reported on purchased loans.

Action Taken and Action Taken Date CMG is required to report the action taken on each application and the action taken date. The actions taken consist of:

Loan originated, Application approved but not accepted, Application denied, Application wi thdrawn by applicant, File

closed for incompleteness, Purchased loan, Preapproval request denied and Preapproval request approved but not

accepted.

Retail, Wholesale, Mini-Corr The system is programmed to automatically select the correct action taken based on the loan’s status and if the loan has

been underwritten.

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


19

Corporate Procedure

For loans submitted to Underwriting, in order to move a loan to Approved status, the Underwriter is required to complete a

comprehensive review of the applicant’s creditworthiness, including ver ification of income and asset documentation. The

loan approval cannot be subject to any underwriting or creditworthiness conditions, however it can be subject to

customary commitment or closing conditions.

Customary commitment or closing conditions include, for example: a clear-title requirement, an acceptable

property survey, acceptable title insurance binder, clear termite inspection, a subordination agreement from

another lienholder, and, where the applicant plans to use the proceeds from the sale of one home to purchase

another, a settlement statement showing adequate proceeds from the sale.

Underwriting or creditworthiness conditions include, for example: conditions that constitute a counter-offer, such

as a demand for a higher down-payment; satisfactory debt-to-income or loan-to-value ratios, a determination of

need for private mortgage insurance, or a satisfactory appraisal requirement; or verification or confirmation, in

whatever form the institution requires, that the applicant meets underwriting conditions concerning applicant

creditworthiness, including documentation or verification of income or assets.

o Regarding the appraisal requirement, the appraisal report is not required to issue an approval as long as

documentation (e.g. purchase contract, LoanSafe report) does not indicate a material defect on the

property that will cause the loan to be denied.

Correspondent The action taken of Purchased loan is automatically selected when the loan is moved to Purchased status.

Reason for Denial For a denied application (including a denied preapproval request in Retail), CMG is required to report the principal

reason(s) for denial up to four reasons. When the reason “Other” is entered, CMG must report the reason manually

entered by the Underwriter in the free-form text field. The denial reasons must be specific and accurately describe the

principal reason or reasons the Underwriter denied the application.

The HMDA reportable denial reasons are only DTI ratio, employment history, credit history, collateral, insufficient cash,

unverifiable information, credit application incomplete, mortgage insurance denied or other.

Retail, Wholesale, Mini-Corr When denying an application, the Underwriter completes the Statement of Credit Denial screen by checking the

appropriate checkboxes for the principal reason(s) for denial up to four reasons maximum. If “Other” is required to be

used, the Underwriter is responsible for carefully wording the specific denial reason in the text field. The system

automatically translates the denial reasons into the HMDA reportable denial reasons.

Correspondent The Denial Reason is not required to be reported on purchased loans.

Type of Purchaser On loans originated or purchased and then sold within the same calendar year, CMG is required to report the type of

purchaser. The HMDA purchaser type is set up in the system defaults for each Investor.

Retail, Wholesale, Mini-Corr, Correspondent The purchaser type is defaulted in the system.

HMDA Procedure

HMDA PROCEDURE

REVISED: 12/29/2017


20

Corporate Procedure

Other Rescources HMDA Policy: HMDA-CP-2003-ALL

https://skynet.cmgmortgage.com/Corporate%20Policies/HMDA-CP-2003-ALL.pdf?Web=1

HMDA Procedure - CMG Financialdocs.cmgfi.com/correspondent/HMDA-procedure.pdf · As outlined in the HMDA Rule, CMG is reporting N/A if the loan is closed for incompleteness or the

Documents