Search::
 
 

Transition Rules

Transition rules were developed to provide lenders with flexibility and guidance for collecting HMDA reportable data for applications received in 2003 but not acted upon until after Jan. 1, 2004. In developing these rules, staff of the Federal Reserve Board weighed the burden and benefit of applying the new rules to applications received before Jan. 1, 2004. For example, the Board believes that the benefit of data that meet revised definitions is not sufficient to warrant applying the revised definitions before Jan. 1, 2004, or to “look back” or take some retrospective measure to determine if data should be reported.

RULES FOR FIELDS AFFECTED

Preapprovals
Lenders have the option of whether to report requests for preapprovals for home purchase loans received before Jan. 1, 2004. Lenders that choose not to report such preapprovals should use Code 3, “not applicable,” in the “preapproval” field of the LAR.

Property Type/ Manufactured Housing
Lenders need not indicate whether an application received before Jan. 1, 2004, involves a manufactured home and may simply report the property type as one- to four-family (Code 1 in the "property type" field).

Purpose of Loan
For applications received before Jan. 1, 2004, lenders may use the definitions of a home improvement loan and a refinancing that were in effect in 2003. The transition rule will not require lenders to “look back” in reporting home improvement loans and refinancings to ensure that they are reporting using the revised rules.

For example, a lender need not report data on an application received before Jan. 1, 2004, for a dwelling-secured loan made for the purpose of home improvement if the lender did not classify the loan as a home improvement loan. Similarly, a lender may report data on an application for a refinancing received in 2003 whether or not the existing obligation was secured by a lien on a dwelling.

Applicant Information
Given the fact that the changes represent significant revisions in the manner in which an applicant’s race and ethnicity are collected and reported, specific transition rules are required. For applications received before Jan. 1, 2004, lenders must collect data on race or national origin using the categories in effect in 2003. They must then convert the data to the codes in effect in 2004 for reporting purposes, using the conversion guide that follows. The conversion guide is only for use in the case of applications received before Jan. 1, 2004.

Conversion Guide: Race and Ethnicity

Current Category

New Category: Ethnicity

New Category: Race

Code 1 – American Indian or Alaskan Native

Code 4 – Not Applicable

Code 1 – American Indian or Alaskan Native

Code 2 – Asian or Pacific Islander

Code 4 – Not Applicable

Code 2 – Asian

Code 3 – Black

Code 4 – Not Applicable

Code 3 – Black or African American

Code 4 – Hispanic

Code 1 – Hispanic or Latino

Code 7 – Not Applicable

Code 5 – White

Code 4 – Not Applicable

Code 5 – White

Code 6 – Other

Code 4 – Not Applicable

Code 7 – Not Applicable

Code 7 – Mail or Telephone

Code 3 – Mail, Internet or Telephone

Code 6 – Mail, Internet or Telephone

Code 8 – Not Applicable

Code 4 – Not Applicable

Code 7 – Not Applicable

Other Revisions and New Data Elements

  • Types of Purchasers
    The list of the types of purchasers and of the applicable codes has been revised. Since the lender’s determination as to type of purchaser is made when the loan is sold, there is no need for a transition rule.
  • Pricing Data
    No transition rules are required for the data elements of rate spread, HOEPA status and lien status since this information is available at the time of final action. However, lenders will not be required to report the rate spread for loans in which the rate lock-in date occurs before Jan. 1, 2004.

back to top

Disclaimer | Privacy Policy