A community organization downloads publicly available federal data showing every covered lender's mortgage applications, originations, and denials broken out by census tract, applicant race, and income. The data shows that one bank approved 85% of applications in predominantly white zip codes but only 34% in predominantly Black zip codes with comparable income profiles, and regulators open a fair-lending investigation. Which federal statute requires lenders to compile and report that dataset?
Correct Answer
C) Home Mortgage Disclosure Act (HMDA)
The Home Mortgage Disclosure Act is the reporting statute: covered institutions must record each application and its outcome with geographic, demographic, and income detail, and the assembled data is released publicly. That data infrastructure is what allows an outside group or a regulator to see a lending pattern that no single file would reveal. The other three statutes supply substantive prohibitions or obligations that the data may help enforce, but none of them creates the dataset.
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Related Topics & Key Terms
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Related Concepts
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
More Financing Questions
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