Assess whether HMDA data can be relied on for the exam (f0f08c)

Situation

After an exception rate twice as high for one group after credit controls, 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 an exception rate twice as high for one group after credit controls.

Hypotheses to test

• An exception rate twice as high for one group after credit controls is noise around an already-controlled Redlining and HMDA Data process in a manufactured-housing lender with dealer-originated files, given geographic application and origination heat map.
• An exception rate twice as high for one group after credit controls is the event in geographic application and origination heat map that forces Remove access or reverse the item for fair-lending officer under Fair Lending.
• Geographic application and origination heat map shows a one-file miss after an exception rate twice as high for one group after credit controls, not a Redlining and HMDA Data program failure.
• Geographic application and origination heat map cannot decide HMDA data can be relied on yet after an exception rate twice as high for one group after credit controls; hold is the only Fair Lending close a manufactured-housing lender with dealer-originated files can defend.

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 HMDA data can be relied on.
• For this Fair Lending Redlining and HMDA Data file, read geographic application and origination heat map against an exception rate twice as high for one group after credit controls and write the one fact that would move HMDA data can be relied on for fair-lending officer.

Recommendation