HMDA: What Is the Home Mortgage Disclosure Act and Why Is It Important?

The Home Mortgage Disclosure Act (HMDA) is a federal law that requires lenders to share information about home loans. Mortgage lenders must gather, maintain and share specific data about the applications they receive and the loans they issue for purchasing, refinancing and home improvement.

HMDA’s purpose is to generate data that can be used to combat discrimination in lending and direct resources to communities in need.

What is the Home Mortgage Disclosure Act (HMDA)?

The HMDA is a federal law that requires mortgage lenders to make information about the loans they issue available to the public. The HMDA was put into place by Congress in 1975 to help combat housing discrimination and inequity in lending. After the 2007-08 housing market crash, the Dodd-Frank Act established the Consumer Financial Protection Bureau (CFPB) and put the HMDA in its care.

How does the HMDA work?

Mortgage lenders submit HMDA information to their local government agency on an annual basis. The Federal Financial Institutions Examination Council (FFIEC) then aggregates the data and releases it to the public.

What’s included in HMDA reporting?

Every home loan application is recorded in a loan application register (LAR). The data is released annually and anonymized so homeowners’ names aren’t visible. It includes basic information about the loan, the property and the borrower, such as:

• Loan: Application date, loan type, loan purpose, loan amount and rate spread Rate spread is the difference between the average prime offer rate (APOR) and the average annual percentage rate (APR) that a given lender offered to mortgage customers in a given year. The higher the rate spread, the more expensive the loan.
• Collateral: Property type and location
• Applicants: Ethnicity, race, sex and gross annual income
• Loan status: Approved, withdrawn or denied
• Denial reason: If the loan was denied, the reason it was denied

How to access HMDA data

You can find HMDA data in several places:

• The CFPB has historical HMDA reporting.
• The FFIEC manages the HMDA data publication and keeps the most recent years of data on the same page.
• The FFIEC also has older HMDA data products, including charts, graphs and an interactive map.

Why is HMDA important?

The HDMA only requires that lenders disclose data in a report — it doesn’t set quotas or prevent lenders from doing anything specific.

However, HMDA data empowers government entities — such as the CFPB and the Federal Trade Commission — and the general public to monitor lending trends.

Public officials, regulators and the public can use HMDA data to:

1. Identify the causes of lending discrimination, specifically housing credit discrimination.
2. Identify, track and better serve the housing needs of communities with public and community investment initiatives.
3. Recognize predatory lending practices and enforce anti-discrimination statutes.

Resources on fair housing and fair lending

Despite policies, including the HMDA, created to counter housing discrimination, it still occurs. In fact, LendingTree found that Black homebuyers in the nation’s 50 largest metros are 1.6 times more likely to be denied a mortgage, according to an analysis of HMDA data.

If you’d like more information on how to file a complaint, what your rights are and where to find local help, check out the resources below.

Official complaints

This U.S. government page provides a guide on how to file official complaints against mortgage lenders. It includes which agency to contact based on the reason for your complaint and offers additional resources, such as an example complaint letter.

Legal information

Here are resources on national laws involving mortgages and housing:

• The Equal Credit Opportunity Act prohibits lending discrimination.
• The Fair Lending Program prohibits lenders from using discriminatory practices.
• The Fair Housing Act prohibits discrimination against people who looking to rent, purchase or finance a home.

Local agencies

You can also reach out to an agency in your area, such as:

• Your state’s consumer protection office
• Your state’s attorney general