Equifax, Experian, Innovis, TransUnioneoplugin.commpartners.com/cdia/110126_Mortgage_edit/110113_Final... · Equifax, Experian, Innovis, TransUnion Introduction Focus of today’s

Consumer Credit ReportingMortgage Reporting Guidelines

CDIA Metro 2® Format Task ForceEquifax, Experian, Innovis, TransUnion

Introduction

� Focus of today’s session is on complete and accurate reporting, specific to mortgage accounts.

Copyright 2010 © Consumer Data Industry Association 2

Disclaimer

� The purpose of this training is to provide guidance in Metro 2® reporting.

� This information is not intended to be legal advice.

� Furnishers of information are solely responsible for the accuracy of the information furnished to a consumer reporting agency.


No legal advice. Any person using the CRRG®, the Metro 2® Format, or information from the Metro 2® Task Force concerning the Metro 2® Format; or any software vendors that provide Metro 2® programming software acknowledges that such documents or communications are not made available for the purpose of providing legal advice or other counsel concerning the accuracy of the information furnished to a consumer reporting agency. Such persons rely solely upon their own determination as to the selection of the appropriate Metro 2® Code to meet any furnisher obligations under the FCRA.


Disclaimer of liability. Any person using the CRRG®, the Metro 2® Format, or information from the Metro 2®

Task Force concerning the Metro 2® Format; or any software vendors that provide Metro 2® programming software acknowledges that the fees paid, directly or indirectly, to receive the CRRG®, the Metro 2® Format, or information from the Metro 2® Task Force concerning the Metro 2® Format are based upon the expectation that such person will be solely responsible for the accuracy of the information furnished to a consumer reporting agency.


ANY PERSON USING THE CRRG®, THE METRO 2® FORMAT OR INFORMATION OBTAINED FROM THE METRO 2® TASK FORCE; OR ANY SOFTWARE VENDORS THAT PROVIDE METRO 2® PROGRAMMING SOFTWARE AGREES THAT UNDER NO CIRCUMSTANCES WILL THE CONSUMER DATA INDUSTRY ASSOCIATION (CDIA) OR ANY CONSUMER REPORTING AGENCY HAVE ANY OBLIGATION OR LIABILITY TO SUCH PERSON FOR ANY DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES SUSTAINED BY SUCH PERSON ARISING OUT OF SUCH PERSON’S FURNISHING OF CONSUMER INFORMATION TO A CONSUMER REPORTING AGENCY REGARDLESS OF HOW SUCH DAMAGES ARISE AND WHETHER OR NOT THE CONSUMER REPORTING AGENY OR CDIA WAS ADVISED SUCH DAMAGES MIGHT ARISE. SHOULD THIS DISCLAIMER CONFLICT WITH ANY PROVISION OF ANY OTHER AGREEMENT, SUCH PERSON AGREES THAT THIS DISCLAIMER SHALL SUPERSEDE SUCH CONFLICTING PROVISION.


Discussion Topics

� Mortgage Loan Reporting Guidelines� Mortgage & Home Equity Loan Modifications� Loans in Forbearance� Short Sales � Stages of Foreclosure� Loan Assumptions� Sold or Transferred Accounts� Frequently Asked Questions & Answers


Mortgage Loan Reporting Guidelines

� Mortgage lenders report 3 basic Portfolio Types:� Mortgage (M)

� Examples: Conventional Mortgage, Second Mortgage, VA Mortgage

� Installment (I)� Examples: Home Improvement, Home Equity, Construction

Loan

� Line of Credit (C)� Home Equity Line of Credit


Mortgage Portfolio Type

Account Types:� 19 = FHA R/E � 25 = VA R/E � 26 = Conventional R/E� 5A = R/E, Jr. Liens & Non-Purchase Money First� 5B = Second Mortgage� 6B = Commercial Mortgage� 2C = Farmers Home Administration R/E� 08 = R/E, Specific Type Unknown

Terms Duration = Number of YearsCopyright 2010 © Consumer Data Industry Association 9


� Highest Credit/Original Loan Amount �Original amount of the loan, excluding interest

payments

� Current Balance� Principal balance plus the interest and

escrow due each month

� Scheduled Monthly Payment Amount �Regular monthly payment, including principal,

interest and escrowCopyright 2010 © Consumer Data Industry Association 10


� Account Status� Special Comment

� Compliance Condition Code


Interest Type Indicator

� Designates the interest type:�F = Fixed �V = Variable/adjustable

� Report indicator ‘V’ for loans where the interest rate will be variable at some point, even if the interest rate starts as fixed.



� ECOA Codes�All valid Metro 2® ECOA Codes are

applicable for mortgage accounts except Authorized Users (3).


Mortgage Portfolio TypeK3 Segment

Two purposes:

� Secondary marketing agency information(Fannie Mae & Freddie Mac only)

� Mortgage Identification Number (MIN)



� Secondary Marketing Agency Information�Agency Identifier

� Fannie Mae = 01� Freddie Mac = 02

�Fannie Mae/Freddie Mac Account Number

� Mortgage Identification Number�Agency Identifier

� 00 = Used when reporting MIN only

�MIN

Copyright 2010 © Consumer Data Industry Association15


� Specialized Payment InformationBalloon Payment Due Date & Amount

� Example:�Segment ID = K4�Specialized Payment Indicator = 01�Payment Due Date = 10122014�Payment Amount = 000100000


Installment Portfolio Type

Account Types:� 04 = Home Improvement � 05 = FHA Home Improvement� 17 = Manufactured Housing� 0A = Time Share Loan� 9A = Secured Home Improvement� 6D = Home Equity � 0F = Construction Loan

Terms Duration = Number of Months Copyright 2010 © Consumer Data Industry Association 17


� Highest Credit/Original Loan Amount �Original amount of the loan, excluding interest

payments

� Current Balance� Outstanding balance amount

� Scheduled Monthly Payment Amount �Regular monthly payment



� Account Status� Special Comment

� Compliance Condition Code


Interest Type Indicator

� Designates the interest type:�F = Fixed �V = Variable/adjustable

� Report indicator ‘V’ for loans where the interest rate will be variable at some point, even if the interest rate starts as fixed.



� K3 Segment – not applicable

� K4 Segment – Balloon Payment Information


Line of Credit Portfolio Type

Account Type:� 89 – Home Equity Line of Credit

Terms Duration = LOC



� Credit Limit� Assigned credit limit

� Highest Credit/Original Loan Amount� Highest balance ever attained

� Current Balance� Outstanding balance amount

� Scheduled Monthly Payment Amount � Minimum amount due based on balance

� Balloon Payment Amount & Due Date� K4 Segment



� Closed Accounts�Special Comment Code “M” – Account closed

at credit grantor’s request�Compliance Condition Code “XA” – Account

closed at consumer’s request



� Additional Special Comments�CJ = Credit line no longer available – in

repayment phase�CK = Credit line reduced due to collateral

depreciation�CL = Credit line suspended due to collateral

depreciation�CM = Collateral released by creditor/balance

owingCopyright 2010 © Consumer Data Industry Association 25

Common Questions – Home Equity

� Can we report Account Type 5B (Second Mortgage) for home equity loans?� Yes, however use of the specific home equity type

codes (89, 6D) is preferred. If you choose to use Type 5B, be sure to report using the guidelines specific to the Mortgage portfolio type.

� How do we report a home equity line of credit when the account is closed because the current balance is greater than the property value?� Continue to report the original Credit Limit and start

reporting Special Comment “M” (account closed at credit grantor’s request).


Mortgage & Home EquityLoan Modifications

� Federal Loan Modification Programs:�Making Home Affordable�Hope for Homeowners�Mortgage Loan Modification Program for

Freddie Mac and Fannie Mae

� General Guidelines for Renegotiated Loans


Making Home Affordable (HAMP)Guidelines for First Liens

� 3-month Trial Period (reduced payments)

�Current prior to & during trial period� Report Account Status 11 and Special Comment AC.

�Delinquent prior to trial period� Report Account Status that reflects the appropriate

level of delinquency and Special Comment AC.


Making Home Affordable (HAMP)Guidelines for First Liens� Example: John’s July payment of $1000 was 30

days delinquent prior to the trial period. His trial period payments are $500.� Actual Payment Amount = 000000500� Account Status = 71 (30 – 59 days past due date)� Payment History Profile = 111132110000

000000000000� Special Comment = AC� Date of Account Information = 08312010� Date of First Delinquency = 12162009� Date of Last Payment = 08042010


Making Home Affordable (HAMP)Results from Trial Period

� Loan Not ModifiedReport the account as per the original contract agreement.

� Loan ModifiedContinue to report one tradeline under the original account number & date opened.


Original Loan Amount

Original amount of the loan plus:

� Balloon Payment, if applicable� Increases in principal balance due to capitalization of delinquent amounts

Terms Duration

Modified terms

Scheduled Monthly Payment Amount

New amount as per modified agreement

Current Balance

Principal balance plus:

� Balloon Payment, if applicable� Interest & Escrow due for current month


Account Status

Appropriate code based on new terms of loan

Special Comment

CN = Loan modified under a federal government plan

K4 SegmentBalloon Payment

� Specialized Payment Indicator = 01� Balloon Payment Due Date � Balloon Payment Amount

L1 SegmentAccount Number Change

New Account Number (if required by your system)


Making Home Affordable Second Lien Modification Program (2MP)

� Modified second liens and partially extinguished second liens�Follow reporting guidelines for modified first

liens, including the trial period (if required) and loan modification.

�For partially extinguished second liens, the forgiven portion of the loan should be deducted from the current balance owed.


Making Home Affordable Second Lien Modification Program (2MP)

� Fully extinguished second liens�Account Status Code = 13 (paid)�Payment Rating = applicable code�Special Comment Code = AU (paid in full for

less than the full balance)�Current Balance & Amount Past Due = zero�Date Closed = date account is forgiven and

considered to be paid


Renegotiated/Refinanced Mortgages

Option 1 - Original Account Number and Date Opened are retained:

� Modify the amounts and terms as per the renegotiated/refinanced agreement. Fields that may be changed include:� Original Loan Amount, Terms Duration, Terms

Frequency, Scheduled Monthly Payment Amount and Current Balance

� Special Comment Code ‘CO’ (Loan modified) may be reported.


Renegotiated/Refinanced Mortgages

Option 2 - Original Account Number changes and Date Opened remains the same:

� Follow option 1.� In the first reporting period following the renegotiation:

� Report original Account Number in the Base Segment.

� Report an L1 Segment.� Change Indicator = 1 (Consumer Account Number change

only)

� New Consumer Account Number

� In subsequent reporting periods, the Base Segment should contain the new Account Number and the L1 Segment should not be reported.


Renegotiated/Refinanced MortgagesOption 3 – Account Number and Date Opened change:� Report the original loan as follows:

� Account Status Code = 13 (Paid)� Payment Rating = the appropriate code that identifies the status

of the account within the activity period being reported� Special Comment = AS (Account closed due to refinance)� Current Balance and Amount Past Due = zero

� Report the renegotiated/refinanced loan as follows:� New Account Number� New Date Opened � All other applicable fields

Important Note: Payment history that occurred prior to the new Date Opened should not be reported with this new account.


Loans in Forbearance� If the consumer is required to make interest

payments only, report:

� Terms Duration = terms of the loan, which can be changed if terms of the loan are extended

� Scheduled Monthly Payment Amount = amount of interest payment due

� Account Status = appropriate code for each month (e.g., Current, 30 days delinquent, 60 days delinquent)

� Current Balance = outstanding balance, which usually remains unchanged during the forbearance period

� Special Comment Code = BT (Principal Deferred/Interest Payment Only)


Loans in Forbearance

� If the consumer is making reduced payments, report:� Terms Duration = terms of the loan, which can be

changed if terms of the loan are extended� Scheduled Monthly Payment Amount = new payment

due� Account Status = appropriate code for each month

(e.g., Current, 30 days delinquent, 60 days delinquent)

� Current Balance = outstanding balance amount, reflecting payments made

� Optional Special Comment = AC (Paying under a partial payment agreement)


Loans in Forbearance� If no payments are required during the

forbearance period, follow the guidelines for deferred accounts:�Terms Duration = blank fill�Terms Frequency = D (Deferred)�Scheduled Monthly Payment Amount = zero�Account Status Code = 11 (Current account)�Current Balance = the outstanding balance

amount�Amount Past Due = zero

(continued on next slide)Copyright 2010 © Consumer Data Industry Association 40

Loans in Forbearance

� If no payments are required (continued)�Payment History Profile = Report valid

payment history that occurred prior to forbearance. Report Character D for the months the account is in forbearance.

� In the K4 Segment, report the Specialized Payment Indicator 02 for Deferred Payment. Also, report the Deferred Payment Start Date as the date the first payment will be due.


Short Sales Report the following fields:

�Account Status Code = 13 (Paid) or 65 (Account paid in full, foreclosure was started)

�Payment Rating = appropriate code for the reporting period

�Special Comment = AU (Account paid in full for less than the full balance)

�Current Balance & Amount Past Due = 0

Note: No specific code is available to indicate a short sale has occurred.


Stages of Foreclosure

� Potential Foreclosure� Foreclosure Proceedings Started

� Foreclosure Cancelled� Foreclosure Started/Now Paid� Deed in Lieu of Foreclosure� Foreclosure Completed



Potential Foreclosure:

� No specific code is available with this designation.

� Continue reporting the correct Account Status Code that defines the current condition of the account.

For example, Account Status 82 represents 120 days delinquent or Account Status 84 represents 180 days delinquent.



Foreclosure Proceedings Started:

� Report Special Comment Code BO (Foreclosure proceedings started).

This special comment should be reported each month as long as the comment applies.

� Report the appropriate Account Status Code, such as Account Status 82 for 120 days delinquent.


Foreclosure Proceedings StartedPayment History Profile Example

� Date of Acct Info = 9/30/2010

� Status = 82 (120 delinq.)� Special Comment = BO� Payment History Profile =

322111110000110000111000

(1st character of PHP represents Status reported in August 2010.)

� Date of Acct Info = 10/30/2010

� Status = 83 (150 delinq.)� Special Comment = BO� Payment History Profile =

432211111000011000011100

(1st character of PHP represents Status reported in September 2010.)



Foreclosure Cancelled:

� No specific code is available for this situation.

� If Special Comment Code BO had been reported, stop reporting the comment(i.e., blank out the Special Comment Code field).


Stages of ForeclosureForeclosure Started / Now Paid:

� Report Account Status Code 65 when foreclosure proceedings had been started, but the consumer subsequently paid the account balance in full.

Account Status 65 specifies ‘Account paid in full. A foreclosure was started’.

� Report the appropriate Payment Rating in conjunction with this Account Status.

Example: Payment Rating = 4 (120 days delinquent) within the activity period being reported

� Report Current Balance of zero.



Deed in Lieu:

� Report Account Status Code 89 which specifies “Deed received in lieu of foreclosure on a defaulted mortgage; there may be a balance due”.




Foreclosure Completed:

� Report Account Status Code 94(Foreclosure completed; there may be a balance due).




Deed in Lieu (Account Status 89) orForeclosure Completed (Account Status 94):

� If consumer is held responsible for the balance left over after the sale of the property, it is appropriate to report a Current Balance.

� If consumer is no longer responsible for the remaining balance on the account, report Current Balance of zero.


Loan Assumed by Another Consumer

Option 1 - Consumer Account Number remains the same for the consumer who is assuming the loan.

The consumers must be reported in separate reporting periods.



Option 1 (continued)� First month:

�Report the original consumer(s) with ECOA Code T (Terminated) and Special Comment Code H (Loan assumed by another party).

�Report the Current Balance as zero.

Important Note: Do not report this consumer in subsequent reporting periods.


Loan Assumed by Another ConsumerOption 1 (continued )

� Following month:�Report the new consumer(s).�Change account information, if appropriate.

For example, Terms Duration, Scheduled Monthly Payment, Current Balance or other fields may be different for the new consumer(s).

Important Note: Do not report the original consumer’s account history in the Payment History Profile.



Option 2 - Consumer who is assuming the loan is given a new Consumer Account Number

The consumers can be reported in the same reporting period.


Loan Assumed by Another ConsumerOption 2 (continued)

� Report original consumer(s) as follows:� Original Account Number� ECOA Code T (Terminated)� Special Comment Code H (loan assumed by another party)� Current Balance as zero� Other appropriate account information

Important Note: Do not report this consumer in subsequent reportingperiods.

� Report new consumer(s) as follows:� New Consumer Account Number� Other appropriate account information

Important Note: Do not report the original consumer’s account history in the Payment History Profile.


Accounts Sold orTransferred to Another Company Report the following Base Segment fields:

� Account Status Code = the code that specifies the status of the account prior to the sale

� Special Comment = ‘AH’ (Purchased by another company) or ‘O’ (Account transferred to another lender)

� Current Balance and Amount Past Due = zero� FCRA Compliance/Date of First Delinquency = if the

account is delinquent at the time of sale, report the date of the first delinquency

� Date Closed = date the account was sold, or if a HELOC was closed prior to being sold, the date the account was originally closed

(continued)Copyright 2010 © Consumer Data Industry Association 57

Sold Accounts

Report the following K2 Segment fields:� Portfolio Indicator = 2 (Sold to name)� Sold To Name = Name of company to which the

account was sold

Important Note: If the account is delinquent or derogatory, it is imperative that you provide the date of the first delinquency to the company that purchased the account.


Accounts Transferred InternallyReport the following Base Segment fields:

� Account Status Code = the code that specifies the status of the account at the time of transfer

� Special Comment = AT (Account closed due to transfer)

� FCRA Compliance/Date of First Delinquency = if the account is delinquent at the time of transfer, report the date of the first delinquency

� Date Closed = date the account was transferred, or if a HELOC was closed prior to being transferred, the date the account was originally closed


FAQ

� Reverse Mortgages� Bankruptcy Chapter 13

Completed


Reverse Mortgages

Question: How should reverse mortgages be reported?

Answer: Do not report reverse mortgages because the consumer has no credit obligation.


Bankruptcy Chapter 13 Completed

Question: How is a mortgage account reported when a consumer completes their payments through a Bankruptcy Chapter 13 plan, but the account is still open and the consumer is continuing to make payments?

Answer: If the account is still open when the Chapter 13 plan payments have been completed, report Consumer Information Indicator Q to remove the previously-reported petition indicator so that ongoing payments made by the consumer can be reported.


Questions can be submitted to the CDIA Metro 2® Format Task Force throughCDIA at:

[email protected]


Credit Reporting Resource Guide®

� Step 1: To download a copy of the Credit Reporting Resource Guide®, please go to:http://www.cdiaonline.org/Metro2Request.cfm

� Step 2: Enter the user name & password combination, given to you during the presentation.

� Step 3: Fill out the Metro 2® Access form.� Step 4: Check your e-mail. You will receive an e-mail

from [email protected] with subject line “Metro2 Access Approved”. The e-mail will provide you with a link and your individual login combination to download the guide. If the e-mail does not include a login combination, please use your existing CDIA login info. If you do not know your CDIA login, you may use the password recovery function, by going to: http://www.cdiaonline.org/account/passwordRecover.cfm


Thank you for attending!


Documents

Equifax, Experian, Innovis, TransUnioneoplugin.commpartners.com/cdia/110126_Mortgage_edit/110113_Final... · Equifax, Experian, Innovis, TransUnion Introduction Focus of today’s