HMDA is the abbreviation for Home Mortgage Disclosure Act. The law was created in 1975 to give the public access to information regarding mortgage lending practices, specifically targeted at enforcing fair lending laws. This act requires that all lenders report certain data about home loans they've originated in order to help consumers fight discrimination when applying for a loan.
What data do lenders have to report?
Lenders are required to collect specific information from loan applicants and the reasons for denying a certain application. In general, HMDA gathers information about race, ethnicity, sex, income and location of property being mortgaged. The following is a list of the types of variables that must be reported: Click here; regulatorysol.com to know more about home mortgage.
- Don't know, not ascertained or no answer --> this should be reported as NA.
- Sum of answers is greater than the population count. For example, if 55% of individuals answered "Black/African American" on race variable and 45% answered "White", do not code the 5% who marked other or wrote in responses as Black/African American. Code the sum of these categories as more than 100%.
- For census block groups: add up all the people who had a loan application, add up all the people who were denied a loan application and divide by the number of loans. Do not include data from non-Census block groups or for applications that "Don't know, not ascertained or no answer".
What are some of the limitations of HMDA data?
The biggest challenge with HMDA is making sure that no one is being denied a loan because of race. If an individual does not have enough information to report under the variables listed above, it should be reported as NA. Don't know applications should NOT be included in loan application or denial counts. Click here for more information about HMDA data on this page.
What are some of the benefits of HMDA data?
HMDA helps enforce fair lending laws by giving consumers, elected officials and government agencies information on where they have been discriminated against. HMDA provides a means to hold lenders accountable for their actions regarding mortgages. In addition, it can be used to help determine where lending discrimination is occurring.
The HMDA data are used by analysts, researchers, realtors and others who want to understand the mortgage market in America. The data can be used to track changes that have occurred over time as well as trends related to home loans. One of the main reasons why this dataset is so popular is because it is the only objective data released by lenders about their mortgage operations.
How can I get HMDA data?
There are three forms that must be filled out in order to get HMDA data: form Originator, form Mortgage Applications and form Denial Registers. Each of these forms must be submitted with an application fee to FFIEC. Further, the data contain no identifying information about individual lenders or borrowers to protect confidentiality.
Article summary [should NOT be copied verbatim]: What is HMDA? How is it used? What are some limitations and benefits of using this dataset? How does one get access to the data?
Notes on summarization:
HMDA and the Loan Applicant