An operations lead is resolving HMDA Reporting Requirements during a quality-control sample. Which action best fits the rule?
Correct Answer
C) Record the action taken and reportable data points
Why this is correct: HMDA requires covered institutions to collect and report specific data points for covered mortgage applications and loans. The core compliance action is to accurately record the action taken (e.g., loan originated, denied) and all required reportable data fields (e.g., loan amount, ethnicity, race). This creates the audit trail for the annual HMDA Loan Application Register (LAR) submission. Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because HMDA is a federal data collection statute; internal policies cannot override its mandatory reporting requirements. "Resolve the HMDA Reporting Requirements issue with the HMDA reporting exception that does not fit the facts" is wrong because applying an irrelevant exception is non-compliant; exceptions (like the partial exemption for certain small-volume lenders) must be based on specific, applicable criteria. "Rely on oral agreement when the rule requires documented compliance" is wrong because HMDA reporting is based on documented, verifiable data from the loan file, not oral statements. Exam tip: For HMDA, think "collect and report data." The compliant action is always to ensure the required data points are recorded accurately and completely.
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 A: Use an internal exception instead of the required federal disclosure or timing rule.
Use an internal exception instead of the required federal disclosure or timing rule. is not correct because it does not apply the rule tested by this file scenario.
Option B: Resolve the HMDA Reporting Requirements issue with the HMDA reporting exception that does not fit the facts.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
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
More Federal Laws Questions
A mortgage file is paused during a lock-desk handoff because of FCRA Adverse Action Notices. Which answer should identify which rule controls the file?
Before the team acts on a production meeting, a training manager must address SCRA Interest Rate Cap. Which response is most defensible?
Before the team acts on a production meeting, the MLO must address FCRA Adverse Action Notice. Which response is most defensible?
A team member asks about RESPA Kickbacks and Referrals in an investor-delivery review while trying to confirm the rule-based response. Which response should the loan team use?
During a disclosure desk review, the loan team encounters an RESPA Servicing Transfer issue. Which response should avoid a shortcut that would misapply the rule?
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An MLO is reviewing procedures for a case where a compliance analyst asks why covered mortgage application data is collected. What is the proper handling?
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