Key Takeaways
- HMDA requires covered lenders to collect, report, and disclose data about mortgage lending activity to promote fair lending and help identify discrimination
- The Loan Application Register (LAR) contains detailed data on each mortgage application including demographics, loan terms, property location, and action taken
- Covered data points include race, ethnicity, sex, income, loan amount, interest rate, property value, and action taken on the application
- HMDA data is made publicly available to help identify patterns of discrimination and assess whether lenders are serving community credit needs
- Lenders originating at least 25 closed-end mortgage loans or 100 open-end lines of credit in each of the two preceding calendar years must report HMDA data
- The CFPB uses HMDA data for fair lending examinations and enforcement actions
HMDA (Home Mortgage Disclosure Act)
The Home Mortgage Disclosure Act (HMDA) is a federal law enacted in 1975 that requires certain financial institutions to collect, report, and publicly disclose information about their mortgage lending activity. HMDA is implemented by Regulation C, now issued by the CFPB.
Purpose of HMDA
HMDA serves multiple important purposes:
| Purpose | Description |
|---|---|
| Identify discrimination | Detect lending patterns that may indicate discrimination |
| Community reinvestment | Assess whether lenders are meeting housing credit needs |
| Public disclosure | Provide data for public examination of lending practices |
| Fair lending enforcement | Support regulatory examinations and enforcement |
| Market analysis | Understand mortgage market trends and conditions |
Who Must Report
Institutional Coverage
HMDA applies to depository institutions (banks, credit unions, savings associations) and non-depository institutions (mortgage companies) that meet activity thresholds.
Activity Thresholds (2026)
| Loan Type | Threshold |
|---|---|
| Closed-end mortgage loans | 25 or more in each of the two preceding calendar years |
| Open-end lines of credit | 100 or more in each of the two preceding calendar years |
Asset Threshold
Depository institutions must also meet asset thresholds (adjusted annually for inflation):
- Generally must have assets above the threshold ($56 million for 2025)
- Non-depository lenders have no asset threshold if meeting activity tests
The Loan Application Register (LAR)
The Loan Application Register (LAR) is the core HMDA reporting document. It contains detailed information about each mortgage application.
Data Points Collected
HMDA requires extensive data collection on each application:
| Category | Data Points |
|---|---|
| Application information | Loan type, purpose, preapproval, action taken |
| Property information | Location (census tract), value, type, occupancy |
| Loan information | Amount, interest rate, term, rate spread, fees |
| Applicant information | Income, credit score, DTI, race, ethnicity, sex |
| Denial reasons | Specific reasons if application denied |
| Loan features | Adjustable rate, balloon, interest-only, negative amortization |
Applicant Demographic Data
Lenders must collect (and applicants may decline to provide):
| Data Point | Collection Method |
|---|---|
| Race | Applicant self-identifies from list of categories |
| Ethnicity | Applicant self-identifies (Hispanic/Latino or not) |
| Sex | Applicant self-identifies |
If applicant declines to provide, lender must note based on:
- Visual observation
- Surname (for race/ethnicity only)
Covered Transactions
Reportable Transactions
| Must Report | Examples |
|---|---|
| Home purchase loans | Primary residence, second home, investment |
| Home improvement loans | Secured by dwelling |
| Refinancings | Replacing existing mortgage |
| HELOCs | Home equity lines of credit |
| Reverse mortgages | Home Equity Conversion Mortgages |
Excluded Transactions
| Not Reported | Reason |
|---|---|
| Business/commercial loans | Not for personal, family, household purposes |
| Loans not secured by dwelling | No real property security |
| Temporary financing | Construction loans not converted to permanent |
| Agricultural loans | Farm purpose |
Action Taken Codes
Each application must be reported with an action taken code:
| Code | Action |
|---|---|
| 1 | Loan originated |
| 2 | Application approved but not accepted |
| 3 | Application denied |
| 4 | Application withdrawn by applicant |
| 5 | File closed for incompleteness |
| 6 | Purchased loan |
| 7 | Preapproval request denied |
| 8 | Preapproval request approved but not accepted |
Denial Reason Codes
When applications are denied, lenders must report specific reasons:
| Code | Denial Reason |
|---|---|
| 1 | Debt-to-income ratio |
| 2 | Employment history |
| 3 | Credit history |
| 4 | Collateral |
| 5 | Insufficient cash |
| 6 | Unverifiable information |
| 7 | Credit application incomplete |
| 8 | Mortgage insurance denied |
| 9 | Other |
Rate Spread Reporting
HMDA requires reporting of the rate spread — the difference between the loan's APR and a benchmark rate.
Calculation
Rate Spread = Loan APR - Average Prime Offer Rate (APOR)
Reporting Thresholds
| Loan Type | Report if Rate Spread Exceeds |
|---|---|
| First-lien loans | 1.5 percentage points above APOR |
| Subordinate-lien loans | 3.5 percentage points above APOR |
Why Rate Spread Matters
Rate spread data helps identify:
- Higher-priced lending patterns
- Potential fair lending concerns
- Pricing disparities among demographic groups
Public Disclosure
Modified LAR
HMDA data is made publicly available with some modifications:
- Specific application dates removed
- Exact property addresses not disclosed
- Some personal identifiers protected
- Census tract and year disclosed
Uses of Public Data
| User | Purpose |
|---|---|
| Community groups | Assess lender performance in neighborhoods |
| Researchers | Study lending patterns and discrimination |
| Regulators | Identify examination priorities |
| Advocacy organizations | Support fair lending initiatives |
| Journalists | Investigate lending practices |
CFPB HMDA Data Tools
The CFPB provides free tools to access HMDA data:
- HMDA Data Browser — Query and download data
- Institution search — Find data for specific lenders
- National summary — View aggregate statistics
Fair Lending Analysis
Regulators use HMDA data to analyze fair lending compliance:
Key Metrics Examined
| Metric | What It Shows |
|---|---|
| Denial rates by race/ethnicity | Potential disparities in approvals |
| Rate spread by demographics | Pricing differences among groups |
| Loan volume by census tract | Community reinvestment patterns |
| Loan types by demographics | Product steering concerns |
Regression Analysis
Regulators perform statistical analysis controlling for:
- Credit qualifications
- Loan characteristics
- Property characteristics
- Geographic factors
Unexplained disparities may indicate discrimination.
Reporting Timeline
| Event | Deadline |
|---|---|
| Data collection | Throughout calendar year |
| Annual LAR submission | March 1 following reporting year |
| Public disclosure | Made available by CFPB annually |
Enforcement
Primary Enforcement
The CFPB has primary enforcement authority for HMDA:
- Examines HMDA data as part of fair lending reviews
- Requires correction of reporting errors
- Can assess civil money penalties
Penalties
| Violation | Penalty |
|---|---|
| Failure to collect data | Civil money penalties |
| Inaccurate reporting | Correction requirements |
| Fair lending violations identified through HMDA | Enforcement actions, penalties |
Key Takeaways
- HMDA requires collection and disclosure of mortgage lending data to promote fair lending
- The LAR contains detailed information on each application including demographics, loan terms, and action taken
- Race, ethnicity, and sex must be collected for fair lending monitoring
- Rate spread data helps identify higher-priced lending patterns
- HMDA data is publicly available for community and regulatory analysis
- Lenders meeting activity thresholds (25 closed-end or 100 open-end loans) must report
- CFPB uses HMDA data for fair lending examinations and enforcement
What is the primary purpose of HMDA data collection and disclosure?
Which of the following must be reported on the HMDA Loan Application Register (LAR)?
What is the closed-end mortgage loan activity threshold for HMDA reporting?