The CFPB ordered two financial institutions on Wednesday to pay nearly $500,000 in penalties for violating the Home Mortgage Disclosure Act, which requires certain lenders to accurately collect and report data on home mortgages.
Mortgage Master will pay $425,000 and Washington Federal will pay $34,000 in civil penalties. The agency also released a bulletin putting mortgage lenders on notice about their obligation to submit accurate mortgage information under HMDA.
“When financial institutions report inaccurate information, it obstructs the purpose of the Home Mortgage Disclosure Act and makes it more difficult for the CFPB to discover and stop discriminatory lending,” CFPB Director Richard Cordray said. “Today we are sending a strong signal that no mortgage lending institution – whether bank or nonbank – should be able to mislead the public with erroneous data.”
An exam by the CFPB found that Massachusetts-based Mortgage Master had substantial errors in the more than 21,000 mortgage applications reported in 2011. The Commonwealth Massachusetts Division of Banks also identified significant errors in the company’s filings.
Washington Federal was also found to have substantial errors in approximately 6,000 mortgage applications reported for 2011. Both entities have, since the CFPB’s discovery of the inaccuracies, taken steps to improve their compliance systems.
Congress passed the HMDA in 1975 to make loan information available to the public. Banks, credit unions, savings associations and mortgage companies are required to disclose information about home mortgage applications. The Dodd-Frank Act transferred HMDA rulemaking authority to the CFPB and made it an HMDA enforcement agency.