The Home Mortgage Disclosure Act (HMDA), which has been in place for more than four decades, requires mortgage lenders to report information about their lending practices.
Yes, it’s a behind-the-scenes, business thing. But it can be a good resource for consumers and borrowers, too. Let’s dive into the HMDA, why it’s important and how you can access HMDA data online.
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.
HMDA allows regulators and the public to determine whether lenders are serving the housing needs of their communities in an equitable manner. The law also aims to identify lending patterns that could be discriminatory and provides public officials with information on mortgage lending in their communities so they can make better policy and budgetary decisions.
Consider that, before HMDA was enacted, “there were areas in which residents, often in urban and minority neighborhoods, were not able to obtain mortgages,” says Jared Maxwell, vice president and direct sales division leader with Embrace Home Loans in Middletown, Rhode Island.
Today, HMDA is enforced by the Consumer Finance Protection Bureau (CFPB).
What is included in HMDA reporting?
Among the components included in HDMA reporting are a mortgage applicant’s ethnicity, race, gender and income. “For each record, you can learn about the loan, the property characteristics, the applicant demographics and the lender,” Maxwell says.
For more information on the Home Mortgage Disclosure Act (HMDA) visit the Scoop Blog
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