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Scan 05 · Steering
A steering scan asks whether similarly situated borrowers received the same set of options. Loan type, purpose, term, lien and channel distribution by borrower group, for your institution against peers in the same market, built from loan-level HMDA.
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Directing a borrower toward a loan product or terms that are less favorable than those the borrower qualifies for, on a prohibited basis. Regulation Z separately bars loan originators from steering a consumer to a transaction because it pays the originator more.
Fair Housing Act and ECOA; Regulation Z, 12 CFR 1026.36(e)
Steering rarely shows up as a denial or a rate spread. It shows up as a distribution: one group landing in FHA where another lands in conventional, or in a longer term, or through a different channel, at similar income and loan size. HMDA carries each of those fields, so the distribution can be read for every lender in a market.
01
Product that follows the group
One group concentrated in FHA where others at similar income and loan amount are in conventional.
02
A split that follows the channel
Broker or correspondent loans to one group in a different product mix than retail loans to the same group.
03
Term and structure by group
Adjustable rates, balloons, interest-only features or longer terms concentrated in one group.
04
A split peers do not show
Lenders of similar size in the same market placing the same group in a different product mix.
05
Income-matched groups, different products
The pattern that survives after matching on income group and loan amount is the one that needs explaining.
06
Pricing that follows the product
A group steered into a product that then carries a higher HPL rate. The pricing scan shows the second half.
The scan itself
The view is a distribution table: each borrower group as a row, each product dimension as a column set, your institution and the peer set side by side. The same filters that ran the underwriting and pricing scans carry across, so the population is identical.
Illustrative layout. Your version runs on your own loan application register and the peer set you define, with every filter recorded in the view.
How to read it
Start with loan type by minority status, matched on income group. If the FHA share for one group is well above the peer figure for the same group at the same income, add channel. If the split follows the channel, the finding has a name.
HMDA carries income and loan amount but not credit score for most filers, so a product split can reflect credit profile the public record does not see. The scan tells you where to pull files, and the peer figure tells you whether the split is normal for the market.
The pricing scan for the same segment. Steering into a product is one question. Steering into a product that then prices higher is the one an examiner will ask first.
The workflow
Each step is a set of filters in HMDAVision. Keep them and the scan reruns on the next release in minutes.
1
Define the market, period and population
Originations, purchased loans excluded, one geography. The peer set by volume in that geography.
Output: a defined population and a defensible peer group.
2
Match on income and loan amount
Filter to an income group and a loan-amount band so the borrowers being compared could plausibly have qualified for the same products.
Output: a similarly situated population.
3
Compare loan type by group
Conventional, FHA, VA and USDA shares by borrower group, yours beside peers.
Output: whether product follows the group.
4
Add channel, term and structure
Retail against broker and correspondent, then term, rate type and any balloon or interest-only feature.
Output: whether the split follows the channel or the structure.
5
Carry the segment into the pricing scan
Same filters, HPL rate and rate spread for the group and product in question.
Output: whether the product split carries a pricing cost.
6
Record and repeat
Keep the selections. The next release shows whether the distribution moved after any change on the sales floor.
Output: a trend line, and an audit trail.
From finding to action plan
Steering is decided at the point of sale, so the plan is about who offers what to whom and why. The scan narrows it to a group, a product and a channel.
When one group lands in FHA at incomes where peers place them in conventional, the question is whether every originator presents the full menu, and whether the conventional product is one they can close.
When the split follows broker or correspondent loans, the compensation and product rules for that channel are the finding, and Regulation Z has a specific rule about them.
When the split is the market's and peers show it too, the borrowers may be right where the available products put them. A product that fits them better is a growth question with a fair lending benefit.
Rerun the same filters. A distribution that moves toward peers in the segment you acted on is evidence the change reached the sales floor.
Start scanning
Ask one question at mortgagedata.ai, or open the distribution on your own institution with a guided seven-day trial of HMDAVision.
Polygon Research is a research and analytics firm, not a law firm. Nothing here is legal advice, and a fair lending program should be built with counsel.
Keep going
Scan 01
Redlining
Your footprint against tract demographics, and who lends in the tracts you skip.
Scan 02
Marketing
Application mix against the population of the market you serve.
Scan 03
Underwriting
Denial disparity, denial reasons and the Minority Delta by loan purpose.
Scan 04
Pricing
Higher-priced lending, rate spread and fees against the market.