Assess whether comparative files show second-review bias (41de08)

Situation

After a SPCP that originated almost no loans to the intended class, mortgage pricing residual by prohibited-basis group is what second-review underwriter can touch in a small-business desk using a new vendor score. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this Redlining and HMDA Data file.

Decision

Second-review underwriter in a small-business desk using a new vendor score 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 Redlining and HMDA Data process in a small-business desk using a new vendor score, 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 second-review underwriter 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 Redlining and HMDA Data program failure.
• Mortgage pricing residual by prohibited-basis group cannot decide comparative files show second-review yet after a SPCP that originated almost no loans to the intended class; hold is the only Fair Lending close a small-business desk using a new vendor score can defend.

Analysis required

• Compare mortgage pricing residual by prohibited-basis group to similarly situated files, second-review notes, and reason codes after a SPCP that originated almost no loans to the intended class.
• Flag any disparate-impact table second-review underwriter cannot explain from mortgage pricing residual by prohibited-basis group.
• Test a documented exception versus a pattern a small-business desk using a new vendor score must defend.
• For this Fair Lending Redlining and HMDA Data 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 comparative files show second-review for second-review underwriter.