Assess whether comparative files show second-review bias (bceb07)

Situation

In a mortgage company after a pricing-regression spike, CRA assessment-area versus lending footprint is the evidence after a HMDA resubmission that still fails quality edits. Community-development lender has to pick Remove access or reverse the item or Temporary compensating control for this Fair Lending Redlining and HMDA Data close using CRA assessment-area versus lending footprint.

Decision

Community-development lender in a mortgage company after a pricing-regression spike must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using CRA assessment-area versus lending footprint after a HMDA resubmission that still fails quality edits.

Hypotheses to test

• CRA assessment-area versus lending footprint reads as Remove access or reverse the item once a HMDA resubmission that still fails quality edits is lined up to the same Fair Lending population.
• CRA assessment-area versus lending footprint is closer to Temporary compensating control after a HMDA resubmission that still fails quality edits; Remove access or reverse the item would over-claim this Redlining and HMDA Data extract.
• Approve a documented exception is still live in CRA assessment-area versus lending footprint for community-development lender in a mortgage company after a pricing-regression spike.
• CRA assessment-area versus lending footprint is missing the fact community-development lender needs after a HMDA resubmission that still fails quality edits; stop this Fair Lending close.

Analysis required

• Check HMDA coding and underwriting policy against comparative files show second-review.
• Compare CRA assessment-area versus lending footprint to similarly situated files, second-review notes, and reason codes after a HMDA resubmission that still fails quality edits.
• Flag any disparate-impact table community-development lender cannot explain from CRA assessment-area versus lending footprint.
• For this Fair Lending Redlining and HMDA Data file, read CRA assessment-area versus lending footprint against a HMDA resubmission that still fails quality edits and write the one fact that would move comparative files show second-review for community-development lender.

Recommendation