Assess whether a model update needs a fair-lending revalidation from mortgage

Situation

A SPCP that originated almost no loans to the intended class put mortgage pricing residual by prohibited-basis group in front of HMDA data-quality manager in a lender expanding into majority-minority census tracts. This Fair Lending / Pricing and Credit Limits close is a model update needs from mortgage pricing residual by prohibited-basis group, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

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

• The population in mortgage pricing residual by prohibited-basis group is the one a SPCP that originated almost no loans to the intended class named, so Remove access or reverse the item follows for this Pricing and Credit Limits file.
• The population in mortgage pricing residual by prohibited-basis group is adjacent only to a SPCP that originated almost no loans to the intended class; Temporary compensating control is the honest Fair Lending call.
• A lender expanding into majority-minority census tracts already contained a SPCP that originated almost no loans to the intended class before mortgage pricing residual by prohibited-basis group arrived; no new Pricing and Credit Limits path.
• Provenance on mortgage pricing residual by prohibited-basis group after a SPCP that originated almost no loans to the intended class is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Check HMDA coding and underwriting policy against a model update needs.
• 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 HMDA data-quality manager cannot explain from mortgage pricing residual by prohibited-basis group.
• 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 model update needs for HMDA data-quality manager.