HMDA Data Scrubbing
The HMDA regulations require LAR updates to be performed every three months, but some regulators may require monthly or quarterly data reviews. Some institutions monitor HMDA data quarterly while others wait until February to scrub it. Regardless of frequency, HMDA data scrubbers should be reviewing their data quarterly or annually. During this period, they should check the accuracy of the GMI and identify any potential problems. For more information on HMDA data scrubbing, read the following. Go to website to learn more about HMDA data scrubbing.
The key to successful HMDA data collection, review, and reporting is a standardized process. It should take into account examiner and auditor perspectives. Everyone involved in the lending process should understand Regulation C and their responsibilities regarding timely collection and reporting. Periodic HMDA data scrubbing is essential to avoiding risk and enhancing the process. For more information on how to conduct an HMDA data scrub, visit the American Bankers Association's website.
Data review can be conducted internally or by a reputable third-party vendor. The scope of the review depends on the institution's data collection processes. If the institution is highly decentralized or has a high origination volume, the risk of HMDA non-compliance may be greater. Data review may reveal simple typographical errors and significant procedural errors that require HMDA data scrubs and resubmission. Correcting errors prior to submission is essential to preventing HMDA non-compliance. The data review process also allows institutions to evaluate weaknesses and take appropriate corrective action.
HMDA requires reporting of only one credit score. In order to reduce reporting errors, financial institutions may designate an HMDA subject matter expert to oversee the process. Such an individual can serve as a reliable resource to answer any questions regarding HMDA data scrubbing. Ultimately, the data scrubber's job is to ensure that data integrity is preserved and maintained. It is important to ensure the quality of data collected by financial institutions at the company website
HMDA error rates are defined in the HMDA Examination Procedures. These error rates depend on the number of data entries in the LAR. They are calculated separately for each data field (loan purpose, action taken, and income). Each institution should determine the acceptable error rate for its internal data. If this is not possible, it may be necessary to undergo HMDA data scrubbing. So, what is the best HMDA data scrubbing method?
HMDA data scrubbing should be done in order to ensure compliance with the rules and regulations. According to the OCC's "HMDA Examiner Transaction Testing Guidelines" (published in October 2015), the OCC must evaluate all OCC-supervised banks for HMDA compliance. If you do not, you are violating the law. You may also be breaking the law if you don't report mortgage information.
HMDA is an important piece of consumer protection legislation, but it is also a major source of information for financial institutions. Despite being public, HMDA data can provide information on financial transactions and consumer behavior. In fact, this data is required to be reported in order to qualify for government programs, including mortgage and refinancing. In addition, HMDA data can be used to determine the quality of mortgage products.You may need to check out this article: https://en.wikipedia.org/wiki/Mortgage_broker
to get more info on the topic.