FFIEC Announces Availability of 2011 Mortgage Data
by Anna DeSimone
President
On September 18, 2012 the Federal Financial Institutions Examination Council (FFIEC) issued a joint release regarding the availability of data on mortgage lending transactions at 7,632 U.S. financial institutions covered by the Home Mortgage Disclosure Act (HMDA). The Council is a formal interagency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions by the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA) the Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB).
The Home Mortgage Disclosure Act (HMDA) requires mortgage lenders to submit a Loan Application Register (LAR) in order to provide the public with loan data that can be used a) to help determine whether financial institutions are serving the housing needs of the communities; b) to assist public offices in distributing investments to attract private investment to areas where it is needed; and c) to assist in identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes.
Lenders (covered institutions) include banks, savings associations, credit unions, and mortgage companies. The following data regarding applications (approved, declined or withdrawn) and purchased loans for home purchase (including an application for pre-approval if the result was either a denial or a loan), home improvement, and refinancing for each calendar year:
1. loan or application number
2. date application was received
3. loan type
4. property type
5. purpose of the loan
6. owner-occupancy
7. pre-approval code (home purchase)
8. amount requested
9. action taken
10. date action taken
11. race of applicant and co-applicant
12. ethnicity of applicant and co-applicant
13. sex of applicant and co-applicant
14. income used to qualify (rounded in thousands)
15. location of the property by MSA (metropolitan statistical area)
16. State (code)
17. County (code)
18. Census Tract
19. HOEPA status (loans originated or purchased
20. Lien status (originated loans)
21. Rate Spread (difference between APR and applicable Treasury yield if the spread is equal to or greater than 3 percentage points for first lien loans or 5 percentage points for subordinate liens)
The 2011 data being released include disclosure statements for each financial institution, aggregate data for each metropolitan statistical area (MSA), nationwide summary statistics regarding lending patterns, and Loan/Application Registers (LARs) for each financial institution (LARs are modified to protect borrower privacy). The FFIEC prepares and distributes this information on behalf of its member agencies.
For 2011, the number of reporting institutions is 7,632 and reflect 11.7 million home loan applications (of which nearly 7.1 million resulted in loan originations) and 2.9 million loan purchases, for a total of nearly 14.7 million actions. The 2011 data reflect the second full year of data reported under revised loan pricing rules, which determine whether a loan is classified as “higher priced.” Lenders now report on loans with annual percentage rates (APRs) that are 1.5 percentage points for first lien loans and 3.5 percentage points for junior lien loans above the average prime offer rates (APORs), estimated using data reported by Freddie Mac in its Primary Mortgage Market Survey.
The HMDA data can facilitate the fair lending examination and enforcement process and promote market transparency. When examiners evaluate an institution’s fair lending risk, they analyze HMDA data in conjunction with other information and risk factors, in accordance with the Interagency Fair Lending Examination Procedures.
The FFIEC announcement stated “The HMDA data alone cannot be used to determine whether a lender is complying with fair lending laws. They do not include many potential determinants of creditworthiness and loan pricing, such as the borrower’s credit history, debt-to-income ratio, and the loan-to-value ratio. Therefore, when examiners conduct fair lending examinations, including ones involving loan pricing, they analyze additional information before reaching a determination regarding institutions’ compliance with fair lending laws.”
To obtain the 3-part series authored by Margret Wright, Bankers Advisory’s AVP & Senior Counsel on “How to Prepare for a Fair Lending Examination“, go to our website www.bankersadvisory.com and on our home page, click Compliance Monitor. You’ll find the three articles published May 18th through the 25th which provide guidance on the Interagency Guideline for Self Assessment.
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
Excellent blog post, I look forward to reading more.
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