Federal Financial Regulatory Agencies Announces Availability of 2006 HMDA Data

September 11, 2007

Washington, D.C. — The Federal Financial Institutions Examination Council (FFIEC) announced the availability of 2006 data on mortgage lending transactions at 8,886 financial institutions covered by the Home Mortgage Disclosure Act (HMDA) in metropolitan statistical areas (MSAs) throughout the nation. Covered institutions include, but are not limited to, banks, savings associations, credit unions, and independent mortgage companies. The HMDA data made available today cover lending activity—applications for loans, loan originations, and purchases of loans—from 2006.

The data include disclosure statements for each financial institution, aggregate data for each MSA, nationwide summary statistics regarding lending patterns, and the Loan Application Register (LAR), modified for borrower privacy, submitted by each institution to its supervisory agency. The FFIEC prepares and distributes these data products on behalf of its member agencies (Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, and Office of Thrift Supervision) and the Department of Housing and Urban Development.

The HMDA data show disposition of loan applications (for example, originated or denied) detailed by property location, applicant characteristics (such as race, ethnicity, sex, and income), and census tract characteristics (minority composition and income). The data also reflect information about loan prices; whether a loan is subject to HOEPA (the Home Ownership and Equity Protection Act); whether a loan or application relates to manufactured housing; and whether a loan is secured by a first or subordinate lien, or is unsecured. (More information about HMDA data reporting requirements is available in the FAQs, questions 9-18, on the FFIEC web site, at www.ffiec.gov/hmda/faq.htm.)

Loan price data in HMDA, first made available in 2005, add to available information about the higher-priced segment of the mortgage market. The growth of this segment has afforded many consumers greater access to credit. But it also has heightened concerns about the terms, the cost and the availability of credit to minority applicants and borrowers, and about lending practices in minority neighborhoods. Differences in the incidence of higher-priced lending (that is, the proportion of loans where the spread between the loan’s annual percentage rate (APR) and the yield on comparable-maturity Treasury securities exceeds specified thresholds) between racial and ethnic groups continued in 2006. These differences continue to raise concerns about compliance with fair lending laws.

The HMDA data can facilitate the fair lending examination and enforcement process and can promote market transparency. When examiners for the federal banking agencies evaluate an institution’s fair lending risk, they analyze HMDA price data in conjunction with other information and risk factors, as directed by the Interagency Fair Lending Examination Procedures (www.ffiec.gov/PDF/fairlend.pdf). Risk factors for pricing discrimination include, but are not limited to, the relationship between loan pricing and compensation of loan officers or brokers; the presence of broad pricing discretion; and consumer complaints.

The HMDA data alone cannot be used to determine whether a lender is complying with fair lending laws. They do not include many potential determinants of loan pricing, such as the borrower’s credit history, debt-to-income ratio, and the loan-to-value ratio. This is why, when the federal banking agencies conduct examinations involving loan pricing, they collect additional information before reaching a determination regarding institutions’ compliance with fair lending laws.

How to obtain FFIEC-prepared HMDA data: Financial institution disclosure statements, individual institutions’ LAR data, and MSA and nationwide aggregate reports are available today on the FFIEC web site (www.ffiec.gov/hmda). Data reports can also be ordered from the FFIEC. An order form describing the available reports, prices, and formats is attached and also can be found at www.ffiec.gov/hmda/orderform.htm.

Source: FFIEC