ALTA, Trade Groups Share Concerns over Proposed FHFA Borrower Survey
January 12, 2016
ALTA joined nine other trade associations in a letter to the Federal Housing Finance Agency (FHFA) sharing concerns about a proposed survey to collect information on mortgage borrowers.
The proposed survey is part of a National Mortgage Database project with the goal of including detailed information on more than 10 million borrowers. FHFA intends to collect this information through a voluntary survey of individuals who currently have a first mortgage loan secured by single-family residential property. The survey would be, in effect, an updated version of FHFA's existing National Survey of Mortgage Borrowers.
The proposed survey would use a questionnaire consisting of 80 to 85 questions intended to elicit information from mortgage borrowers about their loans. FHFA's stated goal of the Database is to "support policymaking and research efforts to understand emerging mortgage and housing market trends."
“We believe it is appropriate for the Government to better understand the residential mortgage markets, as greater understanding of the current trends and forces impacting homebuyers is critical to the development of policies that foster a safe and sound marketplace,” the letter states.
However, the database:
- is overly extensive
- poses a significant danger to consumer privacy through reidentification
- is duplicative of other databases.
Because of this, ALTA and the other trade groups believe the database should not be introduced until several steps are taken, including consultation with the Consumer Financial Protection Bureau (CFPB) to ensure that FHFA and CFPB data cannot result in re-identification of consumers. The steps should also include soliciting additional input on the survey topics and questions.
There is significant concern over privacy issues due to the extent of the database and the number of individuals who will be allowed access. Even under the best circumstances, there’s a strong chance that system data could be leaked or breached by hackers and other intruders and result in harm to consumers.
“Data in the Database can be pieced together with data from other private and public databases to identify individual borrowers and associate an even greater amount of confidential information with them,” according to the letter. “There would be great harm to consumers if the information were to be released carelessly or unwittingly, or if it were to be accessed by individuals aiming to do harm.”
ALTA encourages the FHFA:
- to review the goals of this proposed survey
- identify genuinely unique data points not otherwise captured by existing surveys
- utilize focus groups
- reissue a more complete survey for comment.
Joining ALTA in the letter were the American Bankers Association; the American Financial Services Association; the Consumer Bankers Association; the Consumer Mortgage Coalition; Credit Union National Association; the Housing Policy Council of the Financial Services Roundtable; the Independent Community Bankers of America; the Mortgage Bankers Association and the National Association of Federal Credit Unions.
Contact ALTA at 202-296-3671 or communications@alta.org.