When should [HMDA] code 5 for "private securitization" be used?

Compliance > Regulation C - HMDA > FFIEC FAQs
Q:  When should [HMDA] code 5 for "private securitization" be used?
 
A:  Code '5' is to be used for securitizations by purchasers other than by one of the government-sponsored enterprises identified in codes '1' through '4'. If an institution selling a loan knows or reasonably believes that the loan will be securitized by the institution purchasing the loan, then the seller should use code '5' for "private securitization" regardless of the type or affiliation of the purchasing institution. Reasonable belief or knowledge could, for example, be based on the purchase agreement or other related documents, the institution's previous transactions with the purchaser, or the purchaser's role as a securitizer (such as an investment bank). If an institution selling a loan does not know whether the purchaser will securitize the loan, and, the seller knows that the purchaser frequently holds or disposes of loans by means other than securitization, then the seller should use one of codes '6' through '9', depending on the nature of the purchaser.
 

This can be found in FFIEC’s FAQs on HMDA-related questions, which can be found at:  http://www.ffiec.gov/hmda/faq.htm

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