HMDA — Home Mortgage Disclosure Act (Regulation C)
Master HMDA for the NMLS exam. Reporting requirements, Loan Application Register, data collection fields, coverage thresholds, and fair lending analysis.
Key HMDA Provisions
Purpose of HMDA
Enacted in 1975 to help detect discriminatory lending patterns and ensure financial institutions serve the credit needs of their communities. HMDA requires reporting of mortgage lending data to regulators and the public.
Regulation C
Regulation C implements HMDA and is administered by the CFPB. It specifies which institutions must report, what data must be collected, and how it must be submitted.
Coverage — Who Must Report
Banks, savings associations, credit unions, and mortgage companies that meet asset and lending activity thresholds. Generally, institutions that originated at least 25 closed-end mortgage loans or 200 open-end lines of credit in each of the two preceding calendar years.
Loan Application Register (LAR)
The primary reporting form. Institutions must record and submit data on every mortgage application received, loan originated, and loan purchased. The LAR is submitted annually to regulators. A modified LAR (with personal identifiers removed) is available to the public.
Data Points Collected
HMDA requires collection of: race, ethnicity, and sex of applicant/co-applicant; income; loan amount; loan type and purpose; property location (census tract); action taken (originated, denied, withdrawn, etc.); and reasons for denial.
Actions Reported
The LAR must report: applications received, loans originated, loans purchased, applications approved but not accepted, applications denied, applications withdrawn, and files closed for incompleteness.
Fair Lending Analysis
HMDA data is used by regulators (CFPB, OCC, FDIC, Fed) and community groups to: detect lending discrimination, identify redlining patterns, ensure community reinvestment, and evaluate fair lending compliance.
Sample HMDA Exam Questions
The primary purpose of HMDA is to:
A) Set maximum interest rates for mortgage loans
B) Help detect discriminatory lending patterns and ensure community credit needs are met
C) Establish minimum down payment requirements
D) Regulate the appraisal process
Correct: B — HMDA's primary purpose is to provide public information to help determine whether financial institutions serve the housing credit needs of their communities and to assist in identifying discriminatory lending patterns. It does not set rates, down payments, or regulate appraisals.
Under HMDA, which data must be included on the Loan Application Register (LAR)?
A) Borrower's credit score only
B) Race, ethnicity, sex, income, loan amount, property location, and action taken
C) Only data for approved loans
D) Only data for loans exceeding $500,000
Correct: B — The LAR must include comprehensive data for ALL applications, not just approved or high-value loans. Required data points include demographic information (race, ethnicity, sex), income, loan details (amount, type, purpose), property location, and the action taken on the application.