It’s important to remember that for HMDA purposes, if a lender underwrites an application, they report the application on their HMDA LAR. The HMDA Guide states:
Only one financial institution reports the origination of a covered loan. If more than one institution is involved in the origination of a covered loan, the institution that makes the credit decision approving the application before loan closing or account opening is responsible for reporting the origination of the covered loan. It is not relevant whether the loan closed in the reporting financial institution’s name. If more than one institution approved an application prior to loan closing or account opening and one of those institutions purchased the covered loan after closing or account opening, the institution that purchased the covered loan after closing or account opening is responsible for reporting the origination of the covered loan.
With regard to correspondent lending, there are two separate scenarios to consider:
- Delegated Correspondent
The correspondent is delegated by the investor to make credit decisions on applications. Correspondent reports applications for HMDA:
- Non-Delegated Correspondent
The correspondent lender is not delegated to underwrite loans on behalf of the investor. Investor performs underwriting and reports final actions on applications for HMDA.