HMDA stands for the Home Mortgage Disclosure Act, a federal law enacted in 1975 that requires mortgage lenders to collect, report and disclose information about their residential-related 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.
In 2002, HMDA regulations were revised to require mortgage lenders to report additional information, including new race and ethnicity data, whether the property is a manufactured home and whether the lien is a first or junior lien.
HMDA data continues to include racial identifiers for individual applicants (non-business entities), 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.
Nonprofit mortgage lenders that make $25 million or more in mortgage loans annually or that conduct at least 10 percent 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.
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-service-coverage ratio and loan-to-value ratio—or product choices.
It should be used as a starting point for further analysis.
Current HMDA analysis 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 borrowers because it is possible in many cases to match HMDA data to local property reports and identify the business or individual whose mortgage appears in the HMDA data.
Chase has a number of initiatives in place to ensure fair lending and pricing, including:
Our fair lending program begins with our Fair Lending Policy Statement, approved by Chase's Board of Directors in 2007:
JPMorgan Chase & Co. (JPMorgan Chase) is committed to treating all individuals fairly and equitably in the conduct of its lending businesses in all jurisdictions where it conducts business. This commitment is part of our fundamental mission of providing quality financial services to existing and prospective customers in accordance with all applicable laws. In the United States, this principle is embodied in fair lending laws, such as the Equal Credit Opportunity Act and the Fair Housing Act. These laws require the equitable treatment of all credit applicants, without regard to race, sex, sexual orientation, color, national origin, religion, age, marital status, disability or other prohibited basis. Denying any person equal access to basic economic opportunities, such as homeownership or credit, is morally repugnant, and has no place in our company and will not be tolerated.
Only through the efforts of all of us at JPMorgan Chase can we ensure that every applicant for credit receives fair and equitable treatment and that we have helped each member of the communities JPMorgan Chase serves reach his or her fullest potential.
Chase educates its employees about fair lending in several ways:
Chase takes many steps to ensure applicants are treated fairly in the loan approval process, including:
Chase also has a number of initiatives to ensure that loans are priced fairly, including:
Within Chase, each production channel has regular fair lending meetings with senior executives with oversight responsibilities, including Chase's Corporate Fair Lending Officer.