Assess whether HMDA data can be relied on for the exam from underwriting

Situation

A mortgage company after a pricing-regression spike cannot treat a SPCP that originated almost no loans to the intended class as color commentary on underwriting exception log by branch. Fair-lending officer must close HMDA data can be relied on from that extract under Fair Lending / Pricing and Credit Limits.

Decision

Fair-lending officer 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 underwriting exception log by branch 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 mortgage company after a pricing-regression spike, given underwriting exception log by branch.
• A SPCP that originated almost no loans to the intended class is the event in underwriting exception log by branch that forces Remove access or reverse the item for fair-lending officer under Fair Lending.
• Underwriting exception log by branch 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.
• Underwriting exception log by branch cannot decide HMDA data can be relied on yet after a SPCP that originated almost no loans to the intended class; hold is the only Fair Lending close a mortgage company after a pricing-regression spike can defend.

Analysis required

• Flag any disparate-impact table fair-lending officer cannot explain from underwriting exception log by branch.
• Test a documented exception versus a pattern a mortgage company after a pricing-regression spike must defend.
• Match the adverse-action language to the facts in underwriting exception log by branch.
• For this Fair Lending Pricing and Credit Limits file, read underwriting exception log by branch against a SPCP that originated almost no loans to the intended class and write the one fact that would move HMDA data can be relied on for fair-lending officer.

Recommendation

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