#2021-21, July 9, 2021

FFIEC Releases 2020 HMDA Data

The Federal Financial Institutions Examination Council last month released the 2020 Home Mortgage Disclosure Act (HMDA) data on mortgage lending transactions at 4,475 financial institutions. The data encompasses 22.7 million mortgage applications, and 14.5 million loan originations.  Most of these loans -- 13.2 million -- were closed-end loans while 906,000 were open-end loans, such as home equity lines of credit.

Between 2019 and 2020, the number of originated closed-end loans rose 67 percent with refinance transactions increasing 150 percent and home purchase originations rising 6.7 percent.  The HMDA data showed that low-to-moderate income borrowers accounted for just more than 30 percent of single-family, owner-occupied home purchases -- up from 28.6 percent in 2019.  Loans backed by the Federal Housing Administration, Department of Veterans Affairs or federal farm programs accounted for nearly one-third of all new mortgages in 2020, down slightly from 2019.

According to the data, black borrowers accounted for 7.3 percent of single-family home purchase loans in 2020, a slight increase from 2019.  Hispanic-white borrowers and Asian-American borrowers saw slight decreases in their share of home purchase loans.  The data also noted that Black and Hispanic-white applicants experienced higher denial rates for conventional home mortgages than non-Hispanic-white applicants, but the agencies noted that “these relationships are similar to those found in earlier years,” and that due to the limitations of HMDA data “cannot take into account all legitimate credit risk considerations for loan approval and loan pricing.”

To read more and access the data, click here.

CFPB Issues Final Reg X Mortgage Servicing Rule to Assist Borrowers Affected by COVID-19

Late last month, the Consumer Financial Protection Bureau (CFPB) issued a final rule to help mortgage servicers facilitate streamlined loan modification efforts while establishing a temporary COVID-19 emergency pre-foreclosure period under Regulation X.  The pre-foreclosure requirement, which applies to mortgage loans secured by the borrower’s principal residence, prohibits servicers from making the first notice or filing required to initiate foreclosure until December 31, 2021.

The rule, which is effective on August 31, builds on existing rules that prohibit servicers from making the first notice or filing required by law until a borrower’s mortgage loan obligation is more than 120 days delinquent. The CFPB issued the rule in response to concerns that many borrowers may exit forbearance at the same time this fall when they reach the maximum term of forbearance which could strain servicer capacity.

In addition, final rule will temporarily allow mortgage servicers to offer certain loan modifications made available to borrowers experiencing a COVID-19-related hardship based on the evaluation of an incomplete application.  It also requires servicers to discuss specific additional COVID-19-related information as part of their early intervention obligations; clarifies servicers’ reasonable diligences when the borrower is in a short-term payment forbearance program made available to a borrower experiencing a COVID-19-related hardship based on the evaluation of an incomplete application; and offers a definition of “COVID-19-related hardship.”

To read more, click here.

Fed Hosting July 15 Webinar on New CECL Tool for Community Banks

The Federal Reserve announced that it is launching a new tool to help community banks implement the current expected credit loss accounting standard.  The Scaled CECL Allowance for Losses Estimator, or SCALE, is a spreadsheet-based tool designed to simplify CECL calculations for community banks.

SCALE uses industry or peer data from the Call Report as the starting point for estimating an allowance for credit losses.  Banks must further adjust this starting point to reflect bank-specific facts and circumstances to arrive at a final CECL estimate.

On July 15, the Fed is hosting an “Ask the Fed” webinar featuring speakers from the Financial Accounting Standards Board and the Conference of State Bank Supervisors. Bankers can register for the webinar at AsktheFed.org.

To read more and register for the webinar, click here.

OSHA Updates COVID Workplace Guidance

The Occupational Safety and Health Administration recently updated its guidance on mitigating and preventing the spread of COVID-19 in the workplace.  The guidance states that “most employers no longer need to take steps to protect their fully vaccinated workers who are not otherwise at-risk from COVID-19 exposure.”

In addition, OSHA suggests that unvaccinated customers, visitors or guests wear face coverings, especially in public-facing workplaces such as retail establishments.

To read the guidance, click here.