What Is The Home Mortgage Disclosure Act (HMDA?)

What is the Home Mortgage Disclosure Act (HMDA)?

The Home Mortgage Disclosure Act (HMDA) is a federal law passed in 1975 that requires mortgage lenders to collect and report loan-level data points about their portfolios and practices.

Today, the Consumer Financial Protection Bureau (CFPB) enforces HMDA.

History of HMDA reporting

Over the years, HMDA reporting has expanded, requiring more institutions to report on more types of loans.

For example, in 2018, financial institutions became obligated to report data related to home equity lines of credit (HELOCs). Further, institutions that originated at least 100 closed-end mortgages or 200 open-end lines of credit in the two preceding calendar years were required to report. In 2022, the threshold was adjusted so that institutions originating at least 25 closed-end mortgages were required to report.

Today, mortgage lenders are required to complete more than 100 fields on either an annual or quarterly basis, based on the institution’s size, according to Christopher Sicuranza, senior managing director specializing in financial services at Ankura, a consulting firm.

“The increase in the number of data fields, as well as improvements in public accessibility and the technological interface, allow for all members of the public to better understand and visualize lending patterns in their communities,” Sicuranza says.

What is included in HMDA reporting?

The data further include details about preapprovals and loans sold from one institution to another.

You can use the data to follow the trajectory of specific loans, for example, whether a borrower received a mortgage or if they were denied, if they didn’t complete the application or if something else happened to prevent the loan from being originated.

Some data are excluded from public reporting for privacy reasons, such as the applicant’s:

Additional fields — including exact loan amount, age, debt-to-income (DTI) ratio and property value — are modified into ranges for this same reason.

How can you access HMDA data online?

You can access HMDA data for free online through the CFPB website. Scroll to the “Download HMDA data” section, where you have the choice of downloading data from years 2007 to 2017 or accessing more recent data and summaries, including data for a particular financial institution.

The Federal Financial Institutions Examination Council (FFIEC) has the most recent HMDA data. There’s also a HMDA Data Browser that lets you filter, aggregate, download and visualize HMDA datasets.

Why is HMDA important?

HMDA data serve as a comprehensive source of publicly available information on the U.S. mortgage market. The information offers valuable insights, such as:

• Whether lenders adequately serve the mortgage lending needs in their area
• Whether lenders may be using discriminatory lending practices
• Whether an area needs public or private investment to help revitalize its property market

Most mortgage borrowers are unlikely to analyze HMDA data before choosing a lender. But the information gives regulators the tools to identify potential housing discrimination without jeopardizing consumer privacy. Public officials may use it to make better policy and budgetary decisions about local housing.

Lenders also use the data, says Kimberly Wachtel, former banking officer for Old Second National Bank in Chicago, Illinois. “It can tell us a lot about our own business, what our peers are doing, and where we may differ and/or align. When lenders are more in tune with their loan performance, they can better serve their communities.”

FAQ

• What are the mortgage trends according to HMDA?

  According to the most recent annual report from the CFPB, released in December 2024, the higher interest rate environment has profoundly affected the mortgage market, with borrowers making significantly larger monthly mortgage payments than they did during COVID. Other trends:

  • The total number of mortgage applications continued to decrease in 2023, and buyers tended to have higher incomes relative to prior years.
  • Borrowers paid more in closing costs and lender fees than in the previous year, a trend that was especially pronounced for Black and Latino borrowers.
  • The majority of refinances were cash-out refinances.

• How often do lenders submit HMDA reports?

  Smaller lenders are required to submit HMDA reports annually regarding all residential mortgage applications, originations and refinances. Reports are filed for each full calendar year and must be submitted by March 1st of the following year. Larger institutions must submit quarterly.

• What is the regulation letter for HMDA?

  The Home Mortgage Disclosure Act is covered within the Federal Reserve’s Regulation C and was originally enacted by Congress in 1975. Regulation C requires financial institutions to collect and report data regarding residential mortgage lending, including details regarding the applicant and the loan itself.

Additional reporting by Jean Folger