Assess whether dealer overlays introduce prohibited steering (a8225a)

Situation

In a manufactured-housing lender with dealer-originated files, SPCP written plan versus actual originations is the evidence after a community complaint about appraisal gaps. Community-development lender has to pick Remove access or reverse the item or Temporary compensating control for this Fair Lending Examination and Notices close using SPCP written plan versus actual originations.

Decision

Community-development lender in a manufactured-housing lender with dealer-originated files must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using SPCP written plan versus actual originations after a community complaint about appraisal gaps.

Hypotheses to test

• Authorize Remove access or reverse the item now; SPCP written plan versus actual originations already has the discriminator after a community complaint about appraisal gaps.
• Keep Temporary compensating control in force until SPCP written plan versus actual originations is completed after a community complaint about appraisal gaps for community-development lender.
• Treat SPCP written plan versus actual originations as Approve a documented exception because both readings appear after a community complaint about appraisal gaps.
• Refuse a Fair Lending close: community-development lender does not have the page dealer overlays introduce prohibited turns on in SPCP written plan versus actual originations.

Analysis required

• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• Compare SPCP written plan versus actual originations to similarly situated files, second-review notes, and reason codes after a community complaint about appraisal gaps.
• Flag any disparate-impact table community-development lender cannot explain from SPCP written plan versus actual originations.
• For this Fair Lending Examination and Notices file, read SPCP written plan versus actual originations against a community complaint about appraisal gaps and write the one fact that would move dealer overlays introduce prohibited for community-development lender.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Examination and Notices packet (SPCP written plan versus actual originations after a community complaint about appraisal gaps). The follow-on Examination and Notices action is what community-development lender does next: implement the option, assign an owner, and log the missing fact.