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What is HMDA about? The Home Mortgage Disclosure Act (HMDA) is a federal law enacted in 1975 that requires mortgage lenders to collect, report and disclose information about their mortgage applications, originations and purchases. HMDA was designed to provide the public with loan data that can be used to assess how financial institutions are serving the housing needs of their communities. |
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What information are lenders currently required by HMDA to report? In 2002, HMDA regulations were revised to require mortgage lenders to report additional information, including:
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pricing information on loans above certain thresholds; |
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new race and ethnicity data; |
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whether the home is a manufactured home; |
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whether the lien is a first or junior lien; |
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whether the loan falls under the Home Ownership Equity Protection Act (HOEPA). |
HMDA data continues to include racial identifiers, the amount of the loan and the location of the loan by census tract. Lenders first reported this information to regulators in March 2005. Loans closed and applications dispositioned during the calendar year must be reported by lenders by March 1 of the following year. This data will be made available to requesting parties within 30 days upon request.
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What lenders are required to report their data? For-profit mortgage lenders that make $25 million or more in mortgage loans annually or that do at least 10% of their business in mortgage loans must collect and report HMDA data. In addition, federally insured banks, savings associations and credit unions with a home or branch office in a metropolitan area and that originated at least one home purchase or refinance of a home purchase loan in the preceding calendar year must report HMDA data. |
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What information did Chase file? Chase filed HMDA data for more than 1,049,657 applications with the government on March 3, 2008. |
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What HMDA data is filed about interest rates on mortgages? Lenders report data on loans priced above certain thresholds, which are defined as when the interest rate "spread" - the difference between the annual percentage rate (APR) on a loan and the yield on a comparable-maturity Treasury security - is at least 3 percentage points for a first mortgage and 5 percentage points for a subordinate-lien loan. |
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Are there limitations to HMDA data? The information is not designed to explain why differences in loan pricing exist. For example, HMDA data does not include a borrower's total financial qualifications - such as credit score, property type and value, debt-to-income ratio and loan-to-value ratio - or product choices. |
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How should HMDA data be used? It should be used as a starting point for further analysis. |
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What does it mean that Chase works hard to ensure its lending and pricing practices are fair? Chase has a number of initiatives in place to ensure fair lending and pricing, including:
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Regularly training its loan officers and employees about fair lending. |
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Monitoring of its loans to make sure they meet established pricing guidelines. |
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Monitoring of loan officer and mortgage broker pricing regularly for pricing disparities. |
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Making refunds to customers and taking disciplinary action with employees when policies are not followed. |
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What is Chase doing to help the dream of home ownership? Chase has a variety of initiatives in place:
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Chase works with aspiring homebuyers through seminars, down-payment assistance, credit counseling and financial education. |
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Chase has a wide variety of products and programs to help first-time and repeat homebuyers, as well as buyers who have suffered financial problems. |
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Chase actively reaches out to its communities in an effort to continuously improve its mortgage programs. |
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What factors affect the interest rate borrowers pay? A loan's APR (annual percentage rate) depends on a variety of factors, including a borrower's financial qualifications, product choices and competition within the mortgage lending business. A borrower's financial qualifications include payment and credit history, work history, assets, other debt, down payment, loan-to-value ratio, and the type of property they own or buy. |
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Why do some buyers pay a higher interest rate than others? Characteristics of the loan selected - adjustable vs. fixed rate, length of loan term, etc. - impact the APR. Lenders compete aggressively, and borrowers who shop get better prices. Weaker financial qualifications increase the risk of a borrower's default on a loan, so lenders charge higher rates to compensate for this risk. In addition, product features such as no income verification increase the risk - and thus a loan's price. |
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What can be done about variations in the price of a loan? The mortgage industry will work with others committed to affordable lending to determine why any variations exist so that it can take the necessary steps - including financial education and credit repair - to eliminate them. |
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Should more data be collected that would allow for further analysis? Current HMDA regulations allow government oversight of the mortgage lending marketplace by identifying certain trends without compromising the privacy of borrowers or the ability of lenders to compete. Expanding the scope of the existing law could further affect the privacy of individual borrowers because it is possible in many cases to match HMDA data to local property reports and identify the individual whose mortgage appears in the HMDA data. |
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Can financial education help reduce differences in the price of a loan among a group of borrowers? Yes. Financial education allows individuals to improve their financial qualifications and their attractiveness as a borrower. It also helps them to make informed choices when it comes to getting a mortgage. Chase designs, supports and actively promotes educational efforts that train individuals to make sensible financial decisions, be better customers and get better prices. |
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How can I get Chase's HMDA data? You can request a copy of Chase's HMDA data on CD in Loan Application Register format by clicking here. |
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