Home Buyer Education on Mortgage Financing

In favor of improving mortgage data to prevent housing discrimination

The Consumer Financial Protection Bureau’s (CFPB) is proposing to improve the quality and type of Home Mortgage Disclosure Act (HMDA) data collected, as required by the Dodd-Frank Act. HMDA data is used to evaluate mortgage lending activity, particularly to understand the dynamics of the mortgage market for underserved borrowers and communities of color. Consumer Action joins coalition advocates in supporting the CFPB’s efforts to improve HDMA data collection and urges the Bureau to expand on its collection fields and take further steps to improve the quality of the data collected.

The Consumer Financial Protection Bureau (CFPB) proposed a rule to improve information reported about the residential mortgage market. The rule would shed more light on consumers’ access to mortgage credit by updating the reporting requirements of the Home Mortgage Disclosure Act (HMDA) regulations. HMDA, which was originally enacted in 1975, requires many lenders to report information about the home loans for which they receive applications or that they originate or purchase. The public and regulators can use the information to monitor whether financial institutions are serving the housing needs of their communities and identify possible discriminatory lending patterns. The Bureau also aims to simplify the reporting process for financial institutions.

“It is critical that we shed more light on the mortgage market – the largest consumer financial market in the world,” said CFPB Director Richard Cordray. “The Home Mortgage Disclosure Act helps financial regulators and public officials keep a watchful eye on emerging trends and problem areas in the mortgage market. Today’s proposal would help us understand better how to protect consumers’ access to mortgage credit while simplifying the reporting requirements for financial institutions.”

Consumer Action joined coalition advocates in strongly supporting the collection and public dissemination of data about mortgage lending. Advocates have used HMDA data to analyze trends in mortgage lending and, in particular, to understand the dynamics of the mortgage market for underserved borrowers and communities. The coalition commends the CFPB for expanding and improving this vital data source and suggests that the CFPB consider collecting even more information. Doing so would enhance the ability of researchers, community groups and regulators to assess access to mortgage credit.

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