Fed Publishes Transition Rules for HMDA reforms

WASHINGTON – The Federal Reserve Board on March 3 published transition rules in a proposed amendment to the commentary that explain how institutions should comply with the new Home Mortgage Disclosure Act rules that are scheduled to go in to effect Jan. 1, 2004. Last year the Fed made changes to the HMDA effective in 2004 that require lenders to report new data items, including information about loan pricing. The Fed’s transition rules provide that lenders would not have to identify applications or loans involving manufactured homes or requests for preapproval. Lenders, if they choose to, could continue to apply the current definitions of a home improvement loan and a refinancing. Lenders would report applicant information on ethnicity and race according to the conversion guidance included in the proposed comment. Lenders would also have to report the purchaser type, rate spread, whether a loan is subject to HOEPA, and the lien status of applications and originated loans.