Q: On the FFIEC LAR coding sheet, it states the following should be coded as a 0: “Loan was not originated or was not sold in calendar year covered by the register.” So what purchaser code should be used for portfolio mortgages that are originated but not sold to another entity?
A: For those loans, the bank would report the code as “0” to reflect that the loan was not sold during the current year, even though it will eventually be sold. The language for a loan's sale, which is also included in the HMDA instructions for reporting the type of purchaser code, reflects two concepts. First, if a loan is never sold, the institution should use code “0” to reflect this. Second, this code is used if a bank intends to sell a loan but did not do so during the current reporting year.
This can be found in - HMDA FAQ#20 of the FAQs. The Federal Reserve Board FAQs can be found at: https://consumercomplianceoutlook.org/2011/second-quarter/hmda-and-cra-data-reporting/