|New HMDA Data Show Changes in Mortgage Market
What kinds of mortgages are people getting? Where are people getting loans? The 2006 Home Mortgage Disclosure Act (HMDA) data, released in September 2007 by the Federal Financial Institutions Examination Council (FFIEC), answer these questions and provide other insights into the mortgage market.
The data cover mortgage lending transactions of 8,886 lenders in metropolitan statistical areas throughout the nation, which accounts for about 80 percent of all home lending nationwide.
Mortgage companies gain ground
Recent changes to the data allowed comparisons of loan pricing. The information showed greater incidence of higher-priced lending—loans where the spread between the annual percentage rate, or APR, and the yield on comparable-maturity Treasury securities exceeded specified thresholds—for borrowers residing in census tracts with higher populations of lower credit scores and in census tracts with larger proportions of lower-income and minority households.
Some questions remain unanswered
The absence of this type of information doesn't allow definitive conclusions about whether a lender discriminates unlawfully against particular borrowers or takes unfair advantage of them. Therefore, sound conclusions about a financial institution's lending practices should not be based solely on HMDA data, according to the FFIEC. But the data should be useful as a screening tool for identifying institutions that warrant further scrutiny.
September 25, 2007