The Consumer Mortgage Disclosure Act, officially known as the Home Mortgage Disclosure Act (HMDA), was enacted by Congress in 1975. The act is implemented by the Federal Reserve Board's Regulation C. The act requires lending institutions to report their loan data and make it available to consumers and public officials. Several amendments have been made to the act since its enactment.
Purpose
The Home Mortgage Disclosure Act was created for three primary reasons: to ensure that lending institutions are meeting the housing needs of the communities in which they are located; to help identify potential discriminatory lending practices; and to assist public officials in determining the proper distribution of public-sector investments in a manner that will attract private investments to neighborhoods where they are needed. The Consumer Mortgage Disclosure Act applies to particular financial institutions, including credit unions, banks, savings associations and other mortgage-lending establishments.
Findings
In enacting this regulation, Congress said it had found that a number of lending institutions "have sometimes contributed to the decline of certain geographic areas by their failure" to offer adequate home financing, with reasonable terms and conditions, to qualified applicants. The HMDA provides regulatory agencies with the ability to review loan records of lending institutions in an effort to identify any discriminatory practices against particular economic classes of consumers or within specific areas of the community served by the lender.
Requirements
Lenders are required to disclose the number and dollar amounts of all mortgage loans (including home purchase loans, home improvement loans and refinance loans) originated or for which the lender received completed loan applications; and all mortgage loans purchased by the lender for each fiscal year. To properly evaluate lending practices, lenders are also required to collect data from loan applicants regarding age, sex and national origin, which are recorded in the government monitoring section of the mortgage application.
FFEIC
The Federal Financial Institutions Examination Council is the agency responsible for implementing a system for facilitating access to the data required to be disclosed with this consumer Mortgage Disclosure Act. Disclosure statements are available for inspection and copying by the public, minus personally identifying information about mortgage applicants. The HMDA also requires the disclosure of all mortgage loan applications that are denied or withdrawn, which is included in the data compiled by the FFEIC.
