Assess whether comparative files show second-review bias (1d3268)

Situation

Second-review underwriter in a lender expanding into majority-minority census tracts has one working extract — appraisal-gap outcomes in majority-minority tracts — after a DOJ or CFPB monitor request for pricing files. Second-review underwriter in a lender expanding into majority-minority census tracts has appraisal-gap outcomes in majority-minority tracts after a DOJ or CFPB monitor request for pricing files. If that extract cannot support comparative files show second-review, the honest Fair Lending CRA and Special-Purpose Programs output is hold.

Decision

Second-review underwriter in a lender expanding into majority-minority census tracts must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using appraisal-gap outcomes in majority-minority tracts after a DOJ or CFPB monitor request for pricing files.

Hypotheses to test

• Appraisal-gap outcomes in majority-minority tracts reads as Remove access or reverse the item once a DOJ or CFPB monitor request for pricing files is lined up to the same Fair Lending population.
• Appraisal-gap outcomes in majority-minority tracts is closer to Temporary compensating control after a DOJ or CFPB monitor request for pricing files; Remove access or reverse the item would over-claim this CRA and Special-Purpose Programs extract.
• Approve a documented exception is still live in appraisal-gap outcomes in majority-minority tracts for second-review underwriter in a lender expanding into majority-minority census tracts.
• Appraisal-gap outcomes in majority-minority tracts is missing the fact second-review underwriter needs after a DOJ or CFPB monitor request for pricing files; stop this Fair Lending close.

Analysis required

• Check HMDA coding and underwriting policy against comparative files show second-review.
• Compare appraisal-gap outcomes in majority-minority tracts to similarly situated files, second-review notes, and reason codes after a DOJ or CFPB monitor request for pricing files.
• Flag any disparate-impact table second-review underwriter cannot explain from appraisal-gap outcomes in majority-minority tracts.
• For this Fair Lending CRA and Special-Purpose Programs file, read appraisal-gap outcomes in majority-minority tracts against a DOJ or CFPB monitor request for pricing files and write the one fact that would move comparative files show second-review for second-review underwriter.