Home Mortgage Disclosure Act: Defined and explained

The Home Mortgage Disclosure Act (HMDA) is a federal law that requires certain financial institutions to report data on their lending practices.

Its purpose is to promote transparency in the home lending market, help regulators and the public identify potential discriminatory lending practices, and ensure fair access to mortgage credit.

As a home buyer, familiarizing yourself with HMDA can provide insight into how lenders operate and how mortgage data is monitored.

What is the history of the Home Mortgage Disclosure Act?

Enacted by Congress in 1975, the HMDA requires lenders to report data that helps identify discrimination in lending practices and credit shortages, particularly in urban neighborhoods.

In short, HMDA supports the federal government's efforts to provide equal housing opportunities in the United States.

The law's primary goals are:

• To determine if the covered lenders support the residential housing needs in their communities.
• To enable public officials to determine where public funding is best used to attract private capital.
• To identify possible discrimination in lending.

Initially, the Federal Reserve Board was responsible for implementing HMDA. In 1980, the Federal Financial Institutions Examination Council began coordinating the collection and publication of HMDA data, a role it continues to fulfill today.

The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in 2010, transferred HMDA rulemaking authority to the Consumer Financial Protection Bureau. It also expanded the scope of information that must be collected, reported, and disclosed under the HMDA.

How does the HMDA work?

The HMDA requires specific lenders to provide data on their mortgage lending practices. This includes applicants' demographics, loan details, and the specifics of the properties they buy.

This information is submitted annually or quarterly to regulatory authorities, such as the CFPB, which publishes it in an anonymized public database.

By making the data available, regulators, researchers, and the public can analyze lending trends, spot potential discrimination, and hold lenders accountable.

How can I access HMDA data?

If you're interested in reviewing HMDA data to research mortgage lending in your community, evaluate the effectiveness of lending programs, or use it as a source to assess mortgage lenders, you can access the data through the CFPB website. You can search for nationwide datasets and individual lenders.

Here are all the ways you can access HMDA data:

• Consumer Financial Protection Bureau: The CFPB website has a user-friendly interface for accessing HMDA data.
• Federal Financial Institutions Examination Council: The council provides a platform for accessing aggregated HMDA data. The council manages the HMDA data publication and keeps the most recent years of data on the same page. The council also has older HMDA data, including charts, graphs, and an interactive map.
• Data.Gov: HMDA data is also available on Data.Gov, a comprehensive resource for government data.
• National Community Reinvestment Coalition: The NCRC offers tools and resources for exploring HMDA data.

Home Mortgage Disclosure Act data: What information is reported?

The information lenders must report under the HMDA includes:

• Applicant details. Personal information about applicants, such as race, ethnicity, sex, income, and credit score.
• Property details. Information about the property being financed, including its location and type.
• Loan details. Specifics related to the loan, such as the loan amount, interest rate, term, and whether it's a fixed-rate or adjustable-rate mortgage.
• Loan status. Information about the final loan decision, including whether the application was approved, denied, or withdrawn. HMDA also captures data on the reasons for denial, if applicable.

How to file a Fair Housing Act or lending complaint

If you want to report a Fair Housing Act violation or file a complaint, you can:

• Contact your state consumer protection office. It can assist with complaints against businesses, investigate scams, fraud, and other issues.
• Reach out to the U.S. Department of Housing and Urban Development. Report housing discrimination to HUD online, via phone, or by mail.
• Connect with the Consumer Financial Protection Bureau. Submit a complaint to the CFPB if you believe a lender has discriminated against you for any reason.
• File a complaint directly with the financial institution. Contact their branch manager, customer service hotline, or online support.
• Write to your state's attorney general. Write to your state's top legal officer to report mortgage discrimination in your state.

The bottom line: HMDA reporting is crucial

Ultimately, HMDA helps ensure that banks and lenders are held accountable for how they handle applications and mortgage loans. By requiring transparency, HMDA helps promote just lending practices, giving home buyers more confidence that they'll be treated fairly.

If you're ready to take the next step toward buying a home, start your mortgage application with Rocket Mortgage® today.