Assess whether a model update needs a fair-lending revalidation (4854e6)

Situation

After a SPCP that originated almost no loans to the intended class, geographic application and origination heat map is what fair-lending officer can touch in a manufactured-housing lender with dealer-originated files. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this Redlining and HMDA Data file.

Decision

Fair-lending officer 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 geographic application and origination heat map after a SPCP that originated almost no loans to the intended class.

Hypotheses to test

• Fair-lending officer can defend Remove access or reverse the item from geographic application and origination heat map after a SPCP that originated almost no loans to the intended class in a Fair Lending challenge.
• Fair-lending officer cannot defend Remove access or reverse the item from geographic application and origination heat map; Temporary compensating control is what the extract actually supports after a SPCP that originated almost no loans to the intended class.
• A SPCP that originated almost no loans to the intended class never reached the population in geographic application and origination heat map — reopen intake, do not close a model update needs.
• Two facts in geographic application and origination heat map after a SPCP that originated almost no loans to the intended class conflict for fair-lending officer; hold this Redlining and HMDA Data file.

Analysis required

• Test a documented exception versus a pattern a manufactured-housing lender with dealer-originated files must defend.
• Match the adverse-action language to the facts in geographic application and origination heat map.
• Check HMDA coding and underwriting policy against a model update needs.
• For this Fair Lending Redlining and HMDA Data file, read geographic application and origination heat map against a SPCP that originated almost no loans to the intended class and write the one fact that would move a model update needs for fair-lending officer.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Redlining and HMDA Data packet (geographic application and origination heat map after a SPCP that originated almost no loans to the intended class). The follow-on Redlining and HMDA Data action is what fair-lending officer does next: implement the option, assign an owner, and log the missing fact.