*Changing The HMDA Mindset*
**By Leonard Ryan**
***It has been interesting to see how year after year lenders still struggle with HMDA despite the current process being stable for almost 10 years. Too many compliance managers seem to be locking the door and refusing to take calls in February. Being assigned a HMDA-specific task has been described as “hell” by some and many are volunteered for the job. But I have also seen many companies become well-organized HMDA pros with a new approach.
****Returning from the New Year and realizing there are only two short months to meet the annual HMDA deadline can be daunting. Reviews can be time consuming and time is a precious commodity when facing a deadline. Stress can lead to errors, which can lead to hours or days spent on making corrections or resubmitting rejected HMDA Loan Application Registers (LARs.)
****Even though March 1 has come and gone, HMDA is not over. Instead of being caught up in the annual grind to conduct the HMDA review and submission process, compliance teams should embrace a quarterly or monthly approach to maintain HMDA data. In addition, you can even find technology vendors that offer per-record HMDA compliance to force corrections back to those employees that should have documented the file correctly. Dealing with implementation, data and training issues during a stressful time crunch can be a thing of the past if your HMDA review is proactively conducted throughout the year instead of all at once.
****Consider this: You review your HMDA data quarterly to assess large-scale issues that could never possibly be handled within days of the deadline. Four times a year you have taken the necessary steps to review data, adjust implementation processes and address team members that might need extra training. Your HMDA LAR has been routinely monitored and well-maintained – making your submission process less stressful and easier than ever before.
****What if you discover on February 2 that a team member has been inputting the wrong information into a key field the entire year? Mistakes could have been discovered during a routine check-up and permanently fixed after proper education and training when they were first noticed. The best way to learn from mistakes and improve efficiency is to consistently check the data and correct any problems before they can happen again.
****HMDA Goal: Why Not Fix it All at Funding?
****A real-time HMDA review for the 2013 season is a suggestion vendors should take into consideration if the technology is available. Switching to real-time review allows your staff members to address the data they entered, scan for inconsistencies and guarantee compliance without the hot breath of a deadline on your neck. Data integrity requires the input of accurate data, and a real-time review of your HMDA information would promise an on-time, compliant submission.
****You can have a better HMDA season next year when these best practices are taken into consideration. Increasing profitability and efficiency is possible when redundant processes are eliminated from the HMDA submission routine. Reduce your pre-HMDA stress levels and consistently check for inaccuracies to save time, money and make the March 1 deadline just another day.