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MBA offers recommendations on proposed HMDA rule.

The Mortgage Bankers Association (MBA) questioned whether a Consumer Financial Protection Bureau (CFPB) proposal to increase Home Mortgage Disclosure Act (HMDA) data reporting should apply to multifamily mortgage loans and other business-purpose loans.

In a letter to the CFPB, MBA recommended that the agency exclude multifamily mortgage loans and other loans made for business purposes from HMDA reporting requirements in light of the core purposes of HMDA and the fundamentally different nature of multifamily and commercial real estate lending from single-family residential lending.

The letter said the CFPB was established to "regulate the offering and provision of consumer financial products or services under federal consumer laws," among other things, and that among the CFPB's general powers is the enforcement of consumer financial laws for "the purpose of ensuring all consumers have access to markets for consumer financial products and services...." It recommends that the consumer-centric character of the core purpose of HMDA and the mission of the CFPB should shape the scope of HMDA reporting and that multifamily mortgage loans made for business purposes and other business loans should not be subject to HMDA reporting.

In contrast to single-family home mortgage finance, which currently relies heavily on government programs and standardized terms, "the capital sources available for multifamily mortgage lending are diverse," the letter said. "Such commercial lending programs are proprietary, terms are negotiated and the loan is structured to mitigate risks associated with the property, borrower, market and loan terms, as well as the needs of the investor."

Another challenge associated with reporting data about commercial loans: The commercial loan process is very different from the residential mortgage loan process. "Unlike residential mortgage lending, commercial loans frequently do not involve a formal application process," the letter said. In addition, "the entire HMDA reporting regime is focused on consumer-facing, single-family residential transactions. To the extent that HMDA data related to multifamily mortgage loans is required to be submitted, the data will have limited value," the MBA letter said. "We believe that the costs and burdens associated with providing the information would be disproportionate to the value of the information provided."

Michael Tucker is editorial director of MBA Commercial/Multifamily NewsLink. To subscribe, visit

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Title Annotation:Commercial; Mortgage Bankers Association; Home Mortgage Disclosure Act
Comment:MBA offers recommendations on proposed HMDA rule.(Commercial)(Mortgage Bankers Association)(Home Mortgage Disclosure Act)
Author:Tucker, Michael
Publication:Mortgage Banking
Geographic Code:1USA
Date:Dec 1, 2014
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