Home Mortgage Disclosure Act

What is HMDA and why is it important?

HMDA stands for the Home Mortgage Disclosure Act, and, in its simplest definition, it is exactly as it sounds—a law that requires certain financial institutions to publicly disclose information about home mortgages. Why would we need such a law? Prior to Congress’s enacting HMDA in 1975, the public raised considerable concerns about mortgages—or, more importantly, the lack thereof—in some urban, often minority, neighborhoods. Certain areas seemed to decline, in part because their residents were not able to obtain home mortgages. People noticed, and Congress took action.

HMDA requires lenders to report information about the loan applications they receive (for example, application date, loan type, race, gender, and income of the borrower, and if the loan was approved or denied). The end result? A lot of data. Importantly, there are plenty of resources to help make sense of it all.

• The Consumer Financial Protection Bureau can help you stay on top of the latest national HMDA-related data and lending trends.
• The Federal Reserve’s Home Mortgage Explorer tool will help you explore the data in a user-friendly way. If you’re not accustomed to working with the data directly, check out this infographic before you get started.

HMDA data are valuable for many reasons: They can reveal if lenders are adequately serving their neighborhoods, they can help public officials more effectively make decisions about allocating funds and creating policy, and they can help identify trends of possibly discriminatory practices. But those goals can be accomplished only if the data are accessible as well as available. Whether you choose to examine the details yourself or read the highlights of the findings, you have a variety of options.