The New Lending System - Putting common sense into compliance and risk assessment

Thursday, August 6. 2009

Some Good News for Mortgage Lenders Concerned About Their HMDA Compliance

Compliance with the Federal Reserve Board’s new Regulation C changes is currently a number one priority for every mortgage lending institution. SAS Fair Banking Solution helps lenders prepare to meet the Federal Reserve Board’s Regulation C changes that take effect on Oct. 1, 2009. The SAS R&D Team got the necessary changes to customers early on to ensure they would not have any difficulties or time pressures. SAS Fair Banking affords the flexibility for customers to make the necessary adjustment to their processing in the most effective and efficient way possible.

The FRB’s revisions were designed to reduce the regulatory burden on mortgage lenders by better aligning the Home Mortgage Disclosure Act’s (HMDA’s) above-pricing thresholds with those of the Truth-in-Lending Act’s (TILA’s). Testing of loan origination data based upon the FRB’s new higher-priced mortgage thresholds has already been successfully completed for the SAS Fair Banking compliance solution, months in advance of the October 1 deadline.

SAS Consulting Services can assist lending institutions prepare for the new processing requirements surrounding the rate spread calculations, which entails:

1) change of the benchmark rates themselves,
2) determination of which mortgage products require estimation, or FFIEC-supplied rules, in place of the benchmark values supplied by the FRB,
3) the new thresholds that are to be used for first versus subordinate liens, and
4) more frequent than the current monthly timing for refreshing benchmark rate values.

SAS Fair Banking offers a complete approach that helps banks to comply with the Community Reinvestment Act (CRA), HMDA (Home Mortgage Disclosure Act), and the fair lending laws, as well as offering comprehensive industry-leading community development qualification capabilities. SAS Fair Banking is one of a comprehensive suite of offerings by SAS for financial risk, financial crimes and compliance that enable institutions to effectively manage regulatory, market, credit and operational risk at both an enterprise level, and within each line of business.

Posted by Clark Abrahams in fair lending at 14:57 | Comments (0) | Trackbacks (0)

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About Clark Abrahams

Clark Abrahams is Chief Financial Architect at SAS where he leads business and product development. He has over 30 years of experience in the financial services industry. Along with co-author Mingyuan Zhang, Clark has written two books that re-think credit risk management and granting access to credit:

Fair Lending Compliance: Intelligence and Implications for Credit Risk Management