Home Mortgage Disclosure Act (HMDA) - Regulation C
The Home Mortgage Disclosure Act (HMDA) requires you to obtain certain information from an applicant when taking a loan application for:

• A loan unsecured or secured by a 1-4 family dwelling loan made for the purpose of home improvement. A home improvement loan includes a loan where the applicant has stated on the application that the purpose is for repairing, rehabilitating, or remodeling a dwelling.
• A loan secured by a 1-4 family dwelling which is used to refinance an existing debt.
• A loan secured by a 1-4 family dwelling made for the purpose of purchasing a dwelling.
• A loan made to purchase, refinance, or home improvement of a multi-family loans.

There are five steps you must follow to comply with gathering this information:

1. Determine whether loan is "HMDA reportable."
   The application will ask four questions regarding the purpose and collateral of the loan. If you answer "yes" to any question, it is reportable and you must continue. If "no", you do not have to go any further in the HMDA section, just continue with the rest of the application.
2. Read the government monitoring information disclosure to the applicant.
   If the application is HMDA reportable, the government monitoring information disclosure will pop-up on your screen. Just read it to the applicant(s).
3. Ask for race or national origin and sex of each applicant.
   Once you have read the disclosure, ask the applicant(s) for their race or national origin and sex. Record this information on the HMDA screen.
4. Make visual observation, if applicant declines.
   If the applicant chooses not to provide the information, make a determination as to the race and sex of an applicant based on visual observation or surname. Record your determination in the appropriate fields.
5. Record telephone applications as such.
   When taking a telephone application you are still required to determine whether the application is HMDA reportable. However, you do not need to read the disclosure or ask the applicant about race or sex. Just complete the application by indicating that the application was taken over the telephone.

You are probably thinking that obtaining this information this is contrary to what the ECOA and FHA requires. You are right! Although Eastern Bank is required to collect this information, it can NOT use the information to discriminate against an applicant. The purpose of HMDA is to permit a bank to collect this information and evaluate its performance in lending to various markets it services. This information is not passed on to the underwriters, thus when looking at an application, the underwriter does not know the borrowers race or sex.