Panelists: HMDA Key Is Documentation

Documentation is the real issue lenders should focus on as a result of HMDA data released Sept. 13 by the Federal Reserve Board, according to panelists at the Nonprime Forum in Philadelphia.Many lenders are putting themselves at risk by pushing loans through too quickly with less paper, said panelists at the forum, which is co-sponsored by the National Association of Mortgage Brokers and the National Home Equity Mortgage Association. Leonard Bernstein, a partner with Reed Smith LLP, said lenders should expect consumer groups and plaintiffs' lawyers to initiate further attacks on the industry. "Raw data alone does not show that discrimination has taken place," he told the audience. "The Fed has said the data can lead to inaccurate conclusions and the restriction of credit to people who need it." Bob Levy, executive director of the Mortgage Bankers Association of New Jersey, said the release of Home Mortgage Disclosure Act data will open the door to fair-lending investigations. "Regulators will come into your shop and put loan files side by side," Mr. Levy said. "It's going to happen in a big way."