Guessing For HMDA Info On Phone Applications?

Answered by:

Question:

I know a change was made, but do we have to "guess" race if the loan application is taken by phone or can it be marked unknown for HMDA purposes.

Answer:

Answer by John Burnett:

If the application is taken by telephone, mail, or Internet, and the applicant fails to answer (you must read the explanatory info to the telephone applicant), you need not provide the data (but must indicate the application was taken by mail, Internet or telephone if it's not obvious on the application). Guessing as to the race or ethnicity of an applicant based on sound cues (such as dialect or accent) is a bad idea.

Answer:

Answer by Andy Zavoina:

Good question because this is often misunderstood. I agree with John. Not only is it a bad idea, it would be grossly inaccurate. That makes it misleading and you don't want to be the one saying the annual HMDA submission is true and correct.You are now required to ask. If they decline and you have no visual observation, so be it, it goes unreported.I have read that with the enhanced GMI categories taking effect in 2004, there will be 126 combinations of info. I haven't verified the math, but you'd be a really good guesser to do those justice.

First published on BankersOnline.com 05/5/03