HMDA and Reverse Mortgages
Six (6) years ago, NRMLA's general counsel approached staff at the Federal Reserve Board with the idea that, since reverse mortgage are primarily reverse HELOCs, such loans should not be HMDA-reportable (HELOCs generally are not HMDA-reportable). We confirmed this view informally with staff at the Federal Reserve Board.
Earlier this week, the Federal Financial Institutions Examination Council (which is a federal agency umbrella organization for the federal banking agencies) announced that it recently updated its "Frequently Asked Questions" on HMDA reporting as to reverse mortgages.
The FFIEC states that reverse mortgages are subject to the general rule that lenders must report applications or loans that meet the definition of a home purchase loan, home improvement loan, or refinancing, but reporting is optional if the reverse mortgage (in addition to qualifying as a home purchase loan, home improvement loan, or refinancing) is also a home equity line of credit. The FFIEC further notes that the official staff commentary to Regulation C states that a lender who opts to report a HELOC should report in the loan amount field only the portion of the line intended for home improvement or home purchase.
Below is a Q&A based on questions I submitted to our legal counsel.
For more information, please see: