Tag Archives: HMDA

CFPB’s Regulatory Agenda — Collect More Data!

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The Consumer Financial Protection Bureau has published its Semiannual Regulatory Agenda in the Federal Register.  Of note are amendments to the Home Mortgage Disclosure Act’s Regulation C. These amendments are in the prerule stage.  The Agenda states that HMDA

requires certain financial institutions to collect and report information in connection with housing-related loans and applications they receive for such loans. The amendments made by the Dodd-Frank Act expand the scope of information relating to mortgage applications and loans that must be compiled, maintained, and reported under HMDA, including the ages of loan applicants and mortgagors, information relating to the points and fees payable at origination, the difference between the annual percentage rate associated with the loan and benchmark rates for all loans, the term of any prepayment penalty, the value of real property to be pledged as collateral, the term of the loan and of any introductory interest rate for the loan, the presence of contract terms allowing non-amortizing payments, the origination channel, and the credit scores of applicants and mortgagors. The Dodd-Frank Act also provides authority for the CFPB to require other information, including identifiers for loans, parcels, and loan originators. The CFPB expects to begin developing proposed regulations concerning the data to be collected and appropriate format, procedures, information safeguards, and privacy protections for information compiled and reported under HMDA. The CFPB may consider additional revisions to its regulations to accomplish the purposes of HMDA. (1243)

While esoteric for most, this is an important development. The lending industry collects lots of loan-level data. But that data is very expensive to access for academic and policy researchers. Improved loan-level data will better allow government agencies and researchers to study the mortgage market in a timely way. This will allow them (hopefull!) to identify unsustainable and predatory developments more quickly.

In another effort relevant to the mortgage market, the CFPB also noted that it “is continuing rulemaking activities that will further establish the Bureau’s nonbank supervisory authority by defining larger participants of certain markets for consumer financial products and services. Larger participants of such markets, as the Bureau defines by rule, are subject to the Bureau’s supervisory authority.” (1242)

CFPB Tool Puts HMDA Data on Web

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The Consumer Financial Protection Bureau has posted an online tool to make Home Mortgage Disclosure Act (HMDA) data available to consumers in an easy to use format.    The Bureau notes that in 2012

there were approximately 18.7million HMDA records from 7,400 financial institutions. This information includes the majority of the country’s mortgage applications and mortgages made – known as loan “originations” – by banks, savings associations, credit unions, and mortgage companies. The public information is important because it helps show whether lenders are serving the housing needs of their communities; it gives public officials information that helps them make decisions and policies; and it sheds light on lending patterns that could be discriminatory.

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 The Bureau says that the tool

focuses on the number of mortgage applications and originations, in addition to loan purposes and loan types for 2010 through 2012. It looks specifically at first-lien, owner-occupied, one- to four- family and manufactured homes. Using the tool, the public can see nationwide summaries or they can choose interactive features that allow them to isolate the information for metropolitan areas. The public can easily explore millions of data points with these user-friendly graphs and charts.

I found one of the highlights derived from the tool particularly interesting:  “Of the nearly 13 million applications in 2012 for home purchase loans, home improvement loans, and refinancing, more than 8 million resulted in loan originations.” (2) It will be interesting to see what Google Mashups might come from all this data.

CFPB Issues Fair Lending Report That Highlights Data Collection

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The Fair Lending Report of the Consumer Financial Protection Bureau provides an overview of the Bureau’s actions over the last year.  Some of the most interesting elements of the report relate to future HMDA and TILA rulemaking:

Section 1094 of the Dodd-Frank Act amends HMDA to require the collection and submission of additional data fields related to mortgage loans, including certain applicant, loan, and property characteristics, as well as “such other information as the Bureau may require.” The CFPB is examining what changes it may propose to Regulation C. . . .

Finally, section 1403 of the Dodd-Frank Act requires that the CFPB prescribe regulations under TILA to prohibit “abusive or unfair lending practices that promote disparities among consumers of equal credit worthiness but of different race, ethnicity, gender or age. The CFPB has begun preliminary planning with regard to this rule. (26) (emphasis added)

Data collection about borrower and mortgage characteristics is very fraught.  Lenders have typically fought against efforts to increase such data collection as it could only hurt them if others knew their business so well.  Academics and consumer advocates have complained that data about the mortgage market is very hard to come by unless one had massive financial resources to pay private providers for it.

This was especially true, given the rapid rate of change in that market.  Working with data that is twelve months old was the same as working with outdated information during the Boom years of the early 2000s.  If the CFPB collects and analyzes data in something approximating real-time, it will be far more nimble than previous regulators.  If it shares its data with outside researchers, it is likely to become even more sophisticated in its approach to the dynamic housing finance sector.