HMDA - Reporting GMI for "Entities"
By Deb Jost
HMDA submission time is quickly approaching and we’re getting more and more questions from our clients. So, over the next couple weeks we want to give you some little HMDA refreshers before the big day arrives.
The example we’ll use today is an LLC. The borrower/applicant is the LLC. An LLC, or any other business “entity” is NOT a “natural person.” The signers on the note are the LLC "members." In this example, the LLC members did NOT also sign the note individually/personally, meaning they are not also personally liable on the note. So, there is only ONE borrower/applicant - the LLC, and there is NO co-borrower/co-applicant.
If you refer to page A6 of Appendix A in the HMDA Getting It Right Guide you will find the instructions for completing the Ethnicity, Race and Sex for a borrower that is NOT a “natural person.” In our example, you would report Codes 4, 7, and 4 (not applicable) for the Ethnicity, Race and Sex of the applicant - the LLC. You would report Codes 5, 8, and 5 (no co-applicant) for the Ethnicity, Race and Sex of the co-applicant because there is none. If an individual (natural person) also signed the note personally, meaning they are also personally liable on the note, then you WOULD have a co-applicant and you would use the codes to describe the Ethnicity, Race and Sex of that natural person.
Stay tuned for more upcoming HMDA tips!