Home Mortgage Disclosure Act (HMDA) Data Raphael W. Bostic University of Southern California Housing Statistics User Group West meeting at the University of California at Berkeley September 25, 2003

Outline HMDA background Data details Uses of the data Strengths and weaknesses

HMDA background Passed in 1975 Objective to increase the amount of data on lending in the public domain Subsequent revisions –1989: Application-level reporting required –1993: Reporting requirement expanded –2003: Data elements added

Data Details – Who Reports Depository institutions –Extend at least 1 home loan in a calendar year –Have an office in an MSA –Have assets of $31 million or more (inflation-adjusted) Other mortgage lending institutions –Extend at least 100 home loans in a year –At least $10 million in assets (until this year) –5 or more applications in at least 1 MSA

Data Details – What is Reported Report includes information for: –All applications received during the calendar year –All loan purchases made during the calendar year

Data Details – Data Elements Application data –Loan characteristics Lender Size – Dollar amount Type – Conventional, FHA, VA Purpose – Purchase, refinance, home improvement, multi- family Sale status – If sold, who purchased the loan (Fannie Mae, Freddie Mac, etc.) Pricing – Rate spread, whether a HOEPA loan Lien status – First, subordinate, unsecured

Data Details – Data Elements Application data –Applicant characteristics Race or ethnicity Gender Income –Loan disposition Approved, denied, withdrawn

Data Details – Data Elements Property characteristics –MSA, State, County, Census tract –Whether a manufactured home Geographic data –Associated Census file Median income, population (by race), etc.

Some Uses of the HMDA Data Fair lending enforcement Discrimination and redlining Neighborhood impact and development Banking activity –Level of credit-granting activity –Character of bank, market

Strengths Complete inventory for respondents Highly disaggregated data Relatively high frequency data

Weaknesses Incomplete characterization of lending decision-making process period not comparable to present No performance information Until now, no pricing information

Data Point of Contact Federal Financial Institutions Examination Council – Full dataset: $50 per year for CD-ROM

Questions?