HMDA Preapprovals

It’s quite common for financial institutions to use the terms “prequalification” and “preapproval” differently and even interchangeably. Often, realtors and others in the mortgage industry, define these differently as well too. If you are a HMDA bank; however, you need to be crystal clear what each of these terms mean based on HMDA’s definition. Why? Prequalifications are not HMDA reportable while preapprovals are. If you mix these up, you are bound to have errors on your HMDA LAR, which could require you to resubmit your data.

David explains more in the video.

Video Highlights:

• There is a big difference between prequalifications and preapprovals where HMDA is concerned.
• Whether you have a preapproval program or not is based on very specific criteria.
• Confusion can arise if you do occasional ad hoc preapprovals vs. having a preapproval program. This should be clarified with your field examiners to be sure.

Published
2023/05/25