What Information Is On The Loan Application Register

United States federal law

Home Mortgage Disclosure Act
Citations

Long title	An Act to extend the authorization for the flexible regulation of involvement rates on deposits and share accounts in depository institutions, to extend the National Commission on Electronic Fund Transfers, and to provide for dwelling mortgage disclosure.
Enacted by	the 94th Us Congress
Constructive	December 31, 1975
Public constabulary	94-200
Statutes at Large	89 Stat. 1124
Codification
Titles amended	12 United states of americaC.: Banks and Banking
U.s.a.C. sections created	12 U.S.C. ch. 29 §§ 2801-2811
UsC. sections amended	12 U.s.a.C. ch. 3 § 461 et seq.
Legislative history
Introduced in the Senate every bit S. 1281 by William Proxmire (D-WI) on March 21, 1975 Commission consideration by Senate Banking, Housing, and Urban Affairs, Business firm Banking, Currency, and Housing Passed the Senate on September 4, 1975 (45-37) Passed the Firm on October 31, 1975 (177-147, in lieu of H.R. 10024) Reported past the joint conference commission on December 12, 1975; agreed to past the Senate on Dec 15, 1975 (agreed) and by the House on December 18, 1975 (agreed) Signed into law by President Gerald Ford on December 31, 1975

The Home Mortgage Disclosure Act (or HMDA, pronounced HUM-duh) is a United States federal police that requires certain financial institutions to provide mortgage information to the public. Congress enacted HMDA in 1975.^[ane]

Purposes [edit]

HMDA grew out of public business over credit shortages in certain urban neighborhoods. Congress believed that some financial institutions had contributed to the decline of some geographic areas by their failure to provide adequate home financing to qualified applicants on reasonable terms and atmospheric condition. Thus, 1 purpose of HMDA and Regulation C is to provide the public with information that will help show whether financial institutions are serving the housing credit needs of the neighborhoods and communities in which they are located. A second purpose is to assist public officials in targeting public investments from the individual sector to areas where they are needed. Finally, the FIRREA amendments of 1989 require the collection and disclosure of data virtually applicant and borrower characteristics to aid in identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes.^[2]

Equally the proper noun implies, HMDA is a disclosure constabulary that relies upon public scrutiny for its effectiveness. It does not prohibit any specific action of lenders, and it does not institute a quota organization of mortgage loans to be made in any Metropolitan Statistical Area (MSA) or other geographic area equally defined by the Office of Management and Budget.^[three]

Who reports HMDA information? [edit]

United states financial institutions must study HMDA information to their regulator if they run across sure criteria, such as having assets above a specific threshold. The criteria are different for depository and non-depository institutions and are available on the FFIEC website.^[4] Additional information on institutional and transactional coverage for HMDA data collection years 2017 and onward can be found on the CFPB'south regulation implementation page.^[5] The datasets containing information on HMDA reporters are the HMDA Panel^{[half dozen]} and HMDA Transmittal Sail.

In 2012, there were 7,400 institutions that reported a full of 18.7 million HMDA records.^[7]

Details of the law [edit]

Companies covered under HMDA are required to submit a Loan Application Register (LAR) to the FFIEC via the CFPB which acts as the HMDA processor. The LAR must comprise the information outlined in the Filing Educational activity Guide (FIG) for the relevant collection twelvemonth for all covered applications or loans.^[8] ^[nine] ^[10] ^[xi]

Collection of HMDA data [edit]

For data from years prior to 2017 reporting institutions were required to submit their LARs by March 1 to the Federal Reserve Board on behalf of Federal Financial Institutions Examination Council (FFIEC), an interagency body empowered to administrate HMDA. Pursuant to the Dodd–Frank Wall Street Reform and Consumer Protection Act, every bit of 2018 HMDA data was to be submitted to the Consumer Financial Protection Bureau via an online portal named the HMDA Platform.^[12] The first yr of data submitted via this procedure was 2017.

The Dodd-Frank expanded the data fields collected nether HMDA to provide better regulatory and public visibility into mortgage markets. Some changes include:

the option for applicants and borrowers to self report race and ethnicity information in disaggregated format.^[thirteen] ^[fourteen] ^[xv] The collection of race and ethnicity data requires a specific exemption from Regulation B, which implements the Equal Credit Opportunity Human action (ECOA).
other expanded demographic data
expanded data on loan features and types
use of Legal Entity Identifier (LEI) as a chief identifier for HMDA reporters
use of Universal Loan Identifier (ULI), unless challenge partial exemption, that incorporates a check digit^[sixteen] for accurateness
changes in units of measure or enumerations to previously collected fields

On behalf of the FFIEC, the CFPB maintains a HMDA compliance guide that is publicly available and contains information on how and what to report in the information collection.^[17] Boosted tools are made bachelor by the FFIEC to facilitate compliance with Regulation C.^[eighteen]

The Economic Growth, Regulatory Relief and Consumer Protection Deed allowed small banks to merits fractional exemptions from reporting certain data fields if their Customs Reinvestment Act ratings were not low and they were below certain counts for mortgage action.^[19]

Information nerveless in the LAR [edit]

Contents of the HMDA data collection for 2017^[20] and prior:

The engagement of application
The loan type (conventional loan, FHA loan, VA loan or a loan guaranteed by the Farmers Domicile Administration)
The type of property involved (single-family unit, multifamily)
The purpose of the loan (domicile buy, habitation improvement, refinancing)
Owner occupancy of the belongings (possessor occupied or non-owner occupied)
The loan amount
Whether or non the application was a asking for pre-approval
The type of action taken (approved, denied, withdrawn, etc.)
The appointment of action taken
The location (state, county, MSA and census tract) of the belongings
The ethnicity (Hispanic or non-Hispanic) of the borrower(southward)
The race of the borrower(s)
The gender of the borrower(s)
The gross annual income of the borrower(due south)
If the loan was later sold in the secondary market, the type of entity that purchased it^{[ citation needed ]}
If the loan was denied, the reason why information technology was denied (this field is optional for entities not regulated by the Office of the Comptroller of the Currency)
Rate Spread (Rate Spread is the difference between the April of the loan and the APOR for the calendar week in which the interest rate was locked^[21])
If the loan is or is not subject to the Abode Ownership and Equity Protection Act of 1994
Lien status of the loan (1st or 2d lien)

New or inverse contents of the HMDA data collection for 2018^[22] and onward:

Credit score;
NMLS Identification of the loan originator;
Application channel;
Applicant or co-applicant age;
Combined loan-to-value (CLTV) ratio;
Borrower's debt-to-income (DTI) ratio;
Borrower-paid origination charges;
Points and fees;
Discount points;
Lender credits;
Loan term;
Prepayment penalties;
Non-amortizing loan features;
Interest rate; and
Rate spread for all loans.

Publication of HMDA data and related products [edit]

HMDA data products are hosted on behalf of the FFIEC by the Federal Reserve Board^[23] for information HMDA collections for 2016 and prior and the CFPB for HMDA collections 2017 and later.^[24] Additionally, celebrated files prior to 2014 can be institute at the National Archives and Records Administration (NARA) website. The NARA files include both Final and Ultimate datasets. The Final datasets include one year of resubmissions and late submissions by HMDA reporters and the Ultimate files contain two years of late and resubmitted data. NARA files include the statistical aggregates collected prior to 1990, the transaction level data collected in 1990 and onward, and the Aggregate^[25] ^[26] and Disclosure^[27] ^[28] reports produced from those data. The Aggregate and Disclosure reports were modified in 2018 due to changes in Regulation C.^[29]

In order to determine what transaction level data would be made public in the 2018 and onward HMDA collections, the CFPB used a balancing examination method that weighed public utility of the data against potential for consumer impairment.^[30] The application of the balancing examination resulted in some fields being redacted and others existence modified in lodge to protect applicant and borrower privacy.

HMDA datasets are published annually and include the Loan Application Register (LAR), Transmittal Sheet (TS), and Panel. The LAR contains transaction level information that were covered by Regulation C during the collection year. The LAR is 1 of the few datasets that contains application information equally well equally originated mortgages which allows adding of denial rates and must be accounted for when analyzing HMDA data. The Transmittal Canvas contains self reported information related to HMDA reporters. The Panel is a compilation of regulatory data related to an establishment that is used to profile HMDA reporters past peer group, such as by asset size, or past depository status and provide identifiers that link to other datasets, such as the CRA and the National Information Center. Initial dataset publications are referred to as the Modified LAR and are available on 3/31 of each calendar year.^[31] Later in the yr additional datasets are published including the Snapshot,^[32] a point in time copy of HMDA of all three annual HMDA datasets, and Dynamic, TS and LAR files that are updated weekly.

The HMDA Information Browser was launched as an access tool for the 2018 and onward HMDA collections. The Data Browser allows filtering by geographic location, including Land, MSA, and county, HMDA reporter, past LEI or name, and upwardly to two boosted information fields.^[33] The Data Browser too allows access via API.^[34]

HMDA Data Use in Fair Lending Analysis [edit]

HMDA data can be used to identify indicators of potential mortgage discrimination, however HMDA does not incorporate sufficient data to make conclusive determinations regarding bigotry. It is important to understand that in all cases of possible bigotry, the basic regulatory inquiry revolves around whether a protected class of persons being denied a loan or offered different terms for reasons other than objectively acceptable characteristics (e.g. income, collateral).

If an institution turns down a asymmetric percent of applications past certain races (e.m. African Americans), ethnicities (e.g. Hispanics), or genders (typically women), so there is reason to doubtable that the institution may be discriminating against these classes of borrowers by unfairly denying them credit. Such discrimination is illegal in the United States. Although well-documented during the menstruum of local banking concern potency in American history, the rise of mass fiscal institutions since the early 1990s has led to increasing investor scrutiny regarding profits, and hence a lower likelihood that a depository financial institution tin beget to subsidize such outright bigotry by forgoing loan originations. Yet several recent studies using HMDA data notwithstanding detect racial and ethnic disparities in lending activeness, even when factors such as income are accounted for statistically.^[thirteen] ^[35] ^[36]
If an institution has a unduly low percentage of applications by certain races (due east.g. African Americans), ethnicities (e.g. Hispanics) or genders (typically women) and then there is reason to suspect that the establishment may be discriminating confronting these classes of borrowers by unfairly discouraging them from applying for mortgage loans. Such bigotry is illegal in the U.s.. However, there is tension in this arena betwixt attempts by banks to concenter high quality borrowers and the extent to which borrower quality corresponds with a protected condition. This type of monitoring, however, has been particularly effective as reducing implicit or referral based discrimination, where a discriminatory torso, e.grand. a local sporting social club who quietly favors an all-white membership, is relied upon to recommend applicants. Banks are at present wary of entering such relationships, insofar as they expose the lender to the liability associated with the discriminatory behavior of the partner arrangement.
If an establishment has a disproportionately low percentage of applications from certain areas, compared to areas immediately surrounding the expanse in question, so there is reason to suspect that the institution is engaging in redlining. However, note that few banks are institute to be in violation of redlining clauses, as many pricing or approval models that are deemed legally valid are driven by factors with the implicit effect of redlining geographic areas if these areas contain a asymmetric number of poorly qualified borrowers. Rather, redlining must be quite overt to draw attention (due east.chiliad. using zippo codes as a lending criterion).
If at that place is a asymmetric prevalence of high-interest loans to sure classes of borrowers (eastward.one thousand., Hispanics or women), other attributes equal, so in that location is a reason to suspect that the establishment is engaging in price based discrimination. This is the most active area of compliance monitoring with respect to HMDA information, since risk management policies at many financial institutions are quick to place outright discrimination past lending officers (i.e. denials based on a protected category).

Simultaneously, this area is the rifest for contention with respect to discriminatory claims, since in that location are market driven reasons for charging a higher rate that may showroom discriminatory patterns. For example, a loan officer may query applicants to see if they accept practical and been approved for a loan at any other banks. The rate for those that tin produce another institution'due south offer may and so be adjusted accordingly to remain competitive. However, if a certain ethnic grouping is less likely to "shop around" for the best rate, then the mere application of this principle — which is otherwise non-discriminatory in intent — can produce discriminatory effects. Many disputes between lenders and regulators in the context of price discrimination relate to such scenarios. Once again, the key litmus test is whether the objective characteristic being used to lower or raise the mortgage rate for a given group is substantive in its ain right with respect to the chance or profitability of the potential loan, rather than mere a proxy for racial discrimination.

References [edit]

^ Dwelling house Mortgage Disclosure Act of 1975
^ Consumer Financial Protection Bureau'southward Supervision and Exam Manual
^ Consumer Financial Protection Bureau's Supervision and Examination Manual
^ Reporting Criteria
^ "Dwelling house mortgage disclosure reporting requirements". {{cite spider web}}: CS1 maint: url-status (link)
^ "Public Panel Schema 2020". {{cite web}}: CS1 maint: url-status (link)
^ FFIEC Press Release
^ "Reportable HMDA Data: A Regulatory and Reporting Overview Reference Chart for HMDA Information Collected in 2021" (PDF). {{cite spider web}}: CS1 maint: url-status (link)
^ "HMDA Protection Agency transactional coverage" (PDF). {{cite web}}: CS1 maint: url-status (link)
^ "HMDA transactional coverage" (PDF). {{cite web}}: CS1 maint: url-status (link)
^ "HMDA transactional coverage" (PDF). {{cite spider web}}: CS1 maint: url-status (link)
^ "HMDA Platform". {{cite web}}: CS1 maint: url-status (link)
^ ^a ^b Questsoft. "HMDA Frequently Asked Questions". Retrieved March three, 2018.
^ "Drove and Reporting of HMDA Information about Ethnicity and Race" (PDF). {{cite web}}: CS1 maint: url-condition (link)
^ "Drove and Reporting of HMDA Information about Ethnicity and Race" (PDF). {{cite web}}: CS1 maint: url-condition (link)
^ "Check Digit". {{cite web}}: CS1 maint: url-status (link)
^ "Small-scale Entity Compliance Guide" (PDF). {{cite web}}: CS1 maint: url-status (link)
^ "HMDA tools". {{cite web}}: CS1 maint: url-status (link)
^ "Executive Summary of the 2018 HMDA Interpretive and Procedural Rule" (PDF). {{cite web}}: CS1 maint: url-status (link)
^ "Filing Instruction Guide for HMDA data nerveless in 2017" (PDF). {{cite web}}: CS1 maint: url-status (link)
^ "HMDA - Dwelling Mortgage Disclosure Deed". ffiec.cfpb.gov . Retrieved 2021-01-20 .
^ "Filing Instruction Guide for HMDA data nerveless in 2018" (PDF). {{cite web}}: CS1 maint: url-status (link)
^ "HMDA Products". {{cite web}}: CS1 maint: url-condition (link)
^ "HMDA Data Publication". {{cite web}}: CS1 maint: url-condition (link)
^ "Aggregate Reports". {{cite spider web}}: CS1 maint: url-status (link)
^ "Amass Reports". {{cite web}}: CS1 maint: url-condition (link)
^ "Disclosure Reports". {{cite web}}: CS1 maint: url-condition (link)
^ "Disclosure Reports". {{cite web}}: CS1 maint: url-condition (link)
^ "A&D Report Changes Between 2017 and 2018". {{cite web}}: CS1 maint: url-status (link)
^ "Executive Summary of the HMDA Information Disclosure Policy Guidance" (PDF). {{cite web}}: CS1 maint: url-status (link)
^ "Modified Loan/Application register (LAR)". {{cite web}}: CS1 maint: url-status (link)
^ "Snapshot National Loan-Level Dataset". {{cite spider web}}: CS1 maint: url-status (link)
^ "Data Browser Filters". {{cite web}}: CS1 maint: url-status (link)
^ "Data Browser API". {{cite spider web}}: CS1 maint: url-status (link)
^
^ Lath of Governors of the Federal Reserve Organization (November 2017). "Residential Mortgage Lending in 2016 Evidence from the Home Mortgage Disclosure Deed Data" (PDF) . Retrieved March 3, 2018.

External links [edit]

FFIEC about HMDA
Maps and charts from Consumer Financial Protection Bureau
HMDA resources middle
Public Constabulary 94-200, 94th Congress, S. 1281: An Act to extend the authority for the flexible regulation of involvement rates on deposits and share accounts in depository institutions, to extend the National Commission on Electronic Fund Transfers, and to provide for home mortgage disclosure. [Home Mortgage Disclosure Deed]