Home Mortgage Disclosure Act Overview
What is HMDA?
The Home Mortgage Disclosure Act (HMDA) was enacted by Congress in 1975 and was implemented by the Federal Reserve Board's Regulation C. On July 21, 2011, the rule-writing authority of Regulation C was transferred to the Consumer Financial Protection Bureau (CFPB). HMDA requires many, but not all, lenders to collect and report information regarding loan applications they receive, loans they originate and loans they purchase from other lenders. Not all loans are included; information is only reported if the loan or application meets specific criteria set forth in Regulation C. This information is recorded on the HMDA Loan / Application Register (LAR) and reported annually to the government.
Which lenders are required to report their data?
Depository and nondepository institutions must meet certain criteria, such as asset size thresholds, before they are required to complete a LAR. HMDA requires that the CFPB adjust this threshold yearly.
What information is reported?
HMDA requires that for each application or loan, institutions report the following types of information:
- Identification Number for the loan,
- Date the application was received,
- Loan Type,
- The intended purpose of the loan funds,
- Whether the application was a request for loan preapproval,
- The type of property involved,
- Whether the property is, or will be, owner occupied,
- Loan Amount,
- Action taken on the application (such as approved or denied), and the date on which that action was taken,
- If the loan is originated or purchased and then sold during the same calendar year, the type of entity who purchased the loan,
- For loans meeting certain criteria, the “rate spread”, which is the difference between the loan’s annual percentage rate (or “APR”), and APRs generally offered by a sample of other lenders for similar loans, also referred to as Average Prime Offer Rate (APOR).
- Whether the loan is subject to the federal Home Ownership and Equity Protection Act (“HOEPA”), which generally regulates loans with interest rates and/or fees that exceed certain thresholds,
- The lien status of the loan (such as whether the lender has a first or second lien, or no lien at all on the property)
Applicant and Co Applicant Specific
- Ethnicity, and
- The “Metropolitan Statistical Area” or “Metropolitan Division” in which the property is located,
- The State and County in which the property is located, and
- The Census Tract in which the property is located
How is HMDA data used?
HMDA provides the public with loan data that can be used to:
- Determine if financial institutions are serving the housing credit needs of their neighborhoods and communities;
- Help government officials make public sector investments and indicate to private investors the neighborhoods where their efforts may be needed, and
- Help identify possible discriminatory lending patterns and assist regulatory agencies in enforcing compliance with anti-discrimination statutes.
A number of excellent resources are available that offer background, statistics, helpful hints and other details about HMDA.
- Office of the Comptroller of the Currency: HMDA
- Consumer Financial Protection Bureau (CFPB): HMDA
- Consumer Bankers Association's: HMDA - Background information, rulings, and commentaries on Home Mortgage Disclosure Act.
- Federal Financial Institutions Examination Council: HMDA HMDA Information - The website of the Federal Financial Institutions Examination Council contains background on the history of HMDA, filing information, and access to public data.