There are a lot of data points that you must report for each application on your HMDA LAR. Especially, if you are a Large Filer. Unfortunately, the more data points there are means that there are more chances to make errors. And, as you likely know, HMDA has a very low bar when it comes to the number of errors you can make.
One data field that sometimes causes confusion is the “Initially Payable to Your Institution”. The regulation says to report whether …the covered loan was, or in the case of an application, would have been initially payable to the financial institution…and to report not applicable…if the institution had not determined whether the covered loan would have been initially payable to the institution reporting the application when the application was withdrawn, denied, or closed for incompleteness.
Your options are:
Code 1 – Initially Payable to Your Institution
Code 2 – Not Initially Payable to Your Institution
Code 3 – Not Applicable
David explains more in the video.