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Home Loan Disclosure Act
The Home Mortgage Disclosure Act (HMDA) [1] is a law passed by Congress in 1975,
requiring financial institution to maintain and disclose data pertaining to
homes and home purchases. It was passed to determine whether financial
institutions are serving the housing needs of communities, to help public officials
target public investments from the private sector to areas where they are
needed, and to identify possible discrimininatory lending practices.
In 2002 it was amended to add more public data. The information collected includes
the loan application date and ID number, the type and purpose of the loan, the
type and location of the property, and the race, sex, and gross income of the
applicant.
The data is collected by the Federal Financial Institutions Examination Council (FFIEC) by March 1 of each year for the previous calendar year's lending. The data is then summarized and typically made public by September.
The HMDA data alone does not determine whether lenders priced fairly, since other factors besides race, gender, and income may influence the lending practices of the financial institutions, including the borrower's credit history, loan-to-property-value ratio, and debt-to-income ratio.
In 2005 [2], 8848 (about 80%) of mortgage lenders reported HMDA data. According to the data, 11.67 million Americans purchases a new home, 15.9 million refinanced their home, and 2.54 million made home improvements. New home purchases have increased steadily from just 3.27 million in 1990.
A review of the 2004 HMDA data found that less than one-fifth of borrowers took out higher-priced loans, but that among those who did, Blacks and Hispanics were more likely, and Asians less likely, to have received higher-priced loans than non-Hispanic whites.
Sources:
[1] "CBAs Home Mortgage Disclosure Act information page",
http://www.cbanet.org/Issues/HMDA/HMDA.html#What_is_HMDA
[2] "Higher Price Home Lending and the 2005 HMDA Data",
http://www.cbanet.org/issues/hmda/documents/bull06hmda.pdf
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