Q: During the Outlook Live webinar, the presenters mentioned that institutions should monitor their loan purchase contracts to ensure that they report the appropriate loan purchaser type code. Would you please elaborate further on how merger and acquisition activity may affect such reporting?
A: As discussed during the webinar, it is a good practice to review newly signed or renewed loan purchase contracts to ensure the bank has identified the actual purchaser and reports the purchaser type correctly. Occasionally, upon renewal of the contract, the purchaser may change, which could affect the purchaser type for HMDA reporting purposes. In some cases, even though the bank's purchase relationship has not changed, the actual purchaser type may be different because of two entities merging or one entity acquiring another entity.
This can be found in - HMDA FAQ#22 of the FAQs. The Federal Reserve Board FAQs can be found at: https://consumercomplianceoutlook.org/2011/second-quarter/hmda-and-cra-data-reporting/