The Home Mortgage Disclosure Act (HMDA) was passed by Congress in 1975 and implemented by the Federal Reserve Board. In July of 2011, oversight of HMDA was transferred to the Consumer Financial Protection Bureau (CFPB).
Regardless of its administrator, the purpose of HMDA is to make sure that most lenders collect and report a variety of information they receive on loan applications, including loans they originate. Keep in mind, however, that not all loans fall under HMDA guidelines. Specifically, this set of regulations aims to track mortgage data around the United States.
How is HMDA Data Used?
According to the CFPB, data gathered by HMDA can include: property address, application date, credit score relied on in making the approval decision, results generated through underwriting, loan amount, age of borrower, borrower's debt-to-income ratio, and property value. Personal information is also collected, and includes ethnicity, gender, race, income, and lots more.
This data is used for a variety of purposes, including helping governing bodies determine the housing needs of their communities. HMDA data is also used to provide specific information to public officials who may be drafting policies that make it easier for certain borrowers to qualify for a mortgage. Of course, this same data can be used to find lending patterns that are discriminatory so that changes can be made.
As an example, a 2024 analysis of HMDA data showed that the number of owner-occupied, first-lien home purchases rose by 2% to 3.4 million -- improved compared to 2023, but far below the mini-boom of the post-pandemic period. There were 5.3 million purchase-money loans originated in 2021, 4.3 million in 2022, 3.41 million in 2023 and 3.48 million in 2024. At the same time, HMDA data reveals that Black homebuyers increased their share of first-lien home purchases in recent years, rising steadily from 6.4% of all purchase-money loans in 2017 to 8.2% in 2023. The data also reveal that the percentage of first-lien, owner occupied home purchase loans is on the rise for a range of demographic groups, which is a good sign overall for both home buyers and sellers.
Once you discover the type of data that's reported via HMDA, it's easy to see why its existence is crucial. It would be difficult for policymakers to know about the demographics of mortgage applicants without having a central location for that information to be collected. Plus, knowing applicant credit score, income, race, age, and ethnicity can help government ensure mortgage loans are being offered fairly among all citizens regardless of their ethnic background or age, and to address any patterns of discrimination in making loans.
To that end, HMDA data not only tracks the number of loans made, and where, and to whom, but it also tracks the characteristics of borrowers who sought credit and were denied. Who didn't get access to credit is as important to policymakers as those who did.
Related: Ensuring Mortgage Information Privacy: CFPB
How Many Lenders Report HMDA Data?
According to the Federal Financial Institutions Examination Council (FFIEC) data, the number of lenders that report HMDA data is on a downward trend. Where 7,925 institutions reported this data in 1998, reporting in 2017 came from only 6,762 lenders. Since then, the number continues to dwindle; it was 5,113 in 2023 and was reported as 4,898 in 2024.
Consolidation in the banking and mortgage lending industry is largely the reason for the steady decline in the number of reporting institutions, but shifting reporting requirements have played a role, too. Regulation C reporting requirements apply to lenders who make as few as 25 loans per year, which was said to be burdensome for lenders not particularly active in mortgage lending. For a two-year period, this threshold was lifted to 100 loans, but was reverted to 25 loans after a legal decision in 2022, and so is again capturing virtually all residential mortgage activity.
What Do You Need to Know About HMDA?
When it comes to HMDA reporting and other federal regulations, there's nothing consumers must do on their end other than understand laws that affect them and comply to the best of their ability. Keep in mind that, when you apply for a mortgage loan or another type of loan that falls under HMDA guidelines, the data is collected and reported on your behalf.
You can expect to be asked specific questions about your person, however, including your racial background. This information is now part of the process when you take out a home loan thanks to HMDA reporting rules, and it is to be used to ensure fairness and equitable distribution of mortgage loans to qualified buyers.
Related: Documents Required for a Mortgage
The Bottom Line
The Home Mortgage Disclosure Act, or HMDA, was enacted in order to begin collecting data that could be used in a variety of ways. Without its passage, it would be difficult for policymakers and officials to know if discriminatory or even predatory lending practices were taking place.
Thanks to the creation of this act in 1975, HMDA data is now the most "comprehensive source of publicly available information about the U.S. mortgage market," according to the CFPB. Not only can public officials access this important information about lending practice and borrowing trends, but consumers, researchers and economists can use it to glean insights about housing and mortgage rates as well.
The CFPB even offers the opportunity to download HMDA data from their website. You can access HMDA data for 2007-2017 or HMDA data from 2018 to current directly from the CFPB. You can capture the data and manipulate it on your own, or use the CFPB's HMDA Data Browser.
Related: 3 Questions Mortgage Lenders Can't Ask
This article was updated by Keith Gumbinger.
