Assess whether a redlining pattern exists after controls (0d05c1)

Situation

After an underwriter chat that used coded language, appraisal-gap outcomes in majority-minority tracts is what fair-lending officer can touch in an institution preparing for a redlining exam. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this Examination and Notices file.

Decision

Fair-lending officer in an institution preparing for a redlining exam 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 an underwriter chat that used coded language.

Hypotheses to test

• Fair-lending officer can defend Remove access or reverse the item from appraisal-gap outcomes in majority-minority tracts after an underwriter chat that used coded language in a Fair Lending challenge.
• Fair-lending officer cannot defend Remove access or reverse the item from appraisal-gap outcomes in majority-minority tracts; Temporary compensating control is what the extract actually supports after an underwriter chat that used coded language.
• An underwriter chat that used coded language never reached the population in appraisal-gap outcomes in majority-minority tracts — reopen intake, do not close a redlining pattern exists.
• Two facts in appraisal-gap outcomes in majority-minority tracts after an underwriter chat that used coded language conflict for fair-lending officer; hold this Examination and Notices file.

Analysis required

• Match the adverse-action language to the facts in appraisal-gap outcomes in majority-minority tracts.
• Check HMDA coding and underwriting policy against a redlining pattern exists.
• Compare appraisal-gap outcomes in majority-minority tracts to similarly situated files, second-review notes, and reason codes after an underwriter chat that used coded language.
• For this Fair Lending Examination and Notices file, read appraisal-gap outcomes in majority-minority tracts against an underwriter chat that used coded language and write the one fact that would move a redlining pattern exists for fair-lending officer.

Recommendation

Release Remove access or reverse the item for this Fair Lending Examination and Notices file only when appraisal-gap outcomes in majority-minority tracts after an underwriter chat that used coded language names the fact a redlining pattern exists requires. Fair-lending officer in an institution preparing for a redlining exam should withhold Remove access or reverse the item while that fact is still a hole in appraisal-gap outcomes in majority-minority tracts.