HMDA data-quality manager must resolve whether a redlining pattern exists

Situation

After a SPCP that originated almost no loans to the intended class, mortgage pricing residual by prohibited-basis group is what HMDA data-quality manager can touch in a lender expanding into majority-minority census tracts. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this Pricing and Credit Limits file.

Decision

HMDA data-quality manager 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 mortgage pricing residual by prohibited-basis group after a SPCP that originated almost no loans to the intended class.

Hypotheses to test

• A SPCP that originated almost no loans to the intended class is noise around an already-controlled Pricing and Credit Limits process in a lender expanding into majority-minority census tracts, given mortgage pricing residual by prohibited-basis group.
• A SPCP that originated almost no loans to the intended class is the event in mortgage pricing residual by prohibited-basis group that forces Remove access or reverse the item for HMDA data-quality manager under Fair Lending.
• Mortgage pricing residual by prohibited-basis group shows a one-file miss after a SPCP that originated almost no loans to the intended class, not a Pricing and Credit Limits program failure.
• Mortgage pricing residual by prohibited-basis group cannot decide a redlining pattern exists yet after a SPCP that originated almost no loans to the intended class; hold is the only Fair Lending close a lender expanding into majority-minority census tracts can defend.

Analysis required

• Test a documented exception versus a pattern a lender expanding into majority-minority census tracts must defend.
• Match the adverse-action language to the facts in mortgage pricing residual by prohibited-basis group.
• Check HMDA coding and underwriting policy against a redlining pattern exists.
• For this Fair Lending Pricing and Credit Limits file, read mortgage pricing residual by prohibited-basis group against a SPCP that originated almost no loans to the intended class and write the one fact that would move a redlining pattern exists for HMDA data-quality manager.

Recommendation