Before the loan advances, a quality-control reviewer must resolve a HMDA reporting issue in a company policy update. What should happen?
Correct Answer
A) Record the action taken and reportable data points
Why this is correct: HMDA requires covered institutions to record specific data points for each covered application, including the action taken (e.g., approved, denied, withdrawn) and other reportable information like loan amount, property location, and applicant demographics. The correct answer, "Record the action taken and reportable data points," describes this essential data collection duty. Why the other choices are wrong: "Use prior asset documentation approval as a substitute for the current HMDA Reporting Requirements requirement" is wrong because HMDA data must be collected for each specific application; prior approvals do not satisfy this. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because HMDA data must be recorded at the time of application and action, not in response to a future request. "Rely on oral agreement when the rule requires documented compliance" is wrong because HMDA data must be systematically and accurately documented for reporting. Exam tip: HMDA is about recording and reporting data. The correct choice will focus on the act of collecting the specific, required information.
Why This Is the Correct Answer
The correct response is "Record the action taken and reportable data points" because Covered institutions collect and report HMDA data for covered mortgage applications and loans.
Why the Other Options Are Wrong
Option B: Use prior asset documentation approval as a substitute for the current HMDA Reporting Requirements requirement.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option C: Wait until a regulator asks for the file before applying the federal requirement.
Wait until a regulator asks for the file before applying the federal requirement. is not correct because it does not apply the rule tested by this file scenario.
Option D: Rely on oral agreement when the rule requires documented compliance.
Rely on oral agreement when the rule requires documented compliance. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
HMDA reporting: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
Match the file facts to HMDA reporting; do not choose an exception or shortcut that skips the required rule.
Common Mistakes to Avoid
- -Choosing an internal exception instead of the governing rule
- -Treating preliminary or informal facts as a substitute for required documentation
- -Answering from a familiar but unrelated mortgage topic
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