31 March 2016
The US Home Mortgage Disclosure Act (HMDA), as implemented by Regulation C, requires that most lenders making dwelling-secured loans collect data about each loan application they receive and regularly submit this information to the federal government and government agencies.
Because HMDA largely focuses on single-family, consumer loans, certain multifamily lenders are not aware that they are covered by the statute. And, although many multifamily lenders have low loan volumes that do not trigger HMDA’s current coverage thresholds, the lower thresholds in the recently amended Regulation C will subject many of these lenders to HMDA for the first time.
Failure to comply with HMDA can expose lenders to the scrutiny of the Consumer Financial Protection Bureau and lead to penalties and having to retroactively gather and report data for past years. Institutions that make or purchase commercial multifamily loans should evaluate whether HMDA currently applies to their activities and, if not, whether it will apply once the Regulation C amendments become effective.