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HMDA Data: Loans to Low-Income Borrowers Rose in 2017

A change in Regulation C saw fewer financial institutions reporting Home Mortgage Financial Disclosure Act (HMDA) data in 2017 according to the Federal Financial Institutions Examination Council [1] (FFIEC).

The council recently released the data on mortgage lending transactions covered by HMDA for financial institutions. They included data from banks, savings associations, credit unions, and mortgage companies. The FFIEC data covered lending activity submitted by financial institutions on or before April 18, 2018.

Data revealed that home loans to low- and middle-income borrowers saw a slight uptick for new properties, rising from 26.2 percent to 26.3 percent in 2017. Refinance loans to this group of borrowers also saw an increase from 16.9 percent in 2016 to 22.9 percent in 2017.

In terms of borrower diversity, the report said that the share of home purchase loans for family properties made to black borrowers rose from 6 percent in 2016 to 6.4 percent in 2017. For Hispanic borrowers, this number remained unchanged at 8.8 percent and for Asian borrowers, it rose from 5.5 percent to 5.8 percent.

For refinance loans, the share of loans made to black borrowers increased to 6 percent from 5 percent in the earlier year. The share for Hispanic borrowers also increased from 6.2 percent to 6.8 percent. However, the share of refinance loans to Asian borrowers declined from 5.5 percent to 4 percent during the period.

The data reported information on 12.1 million home loan applications of which 7.3 million resulted in loan originations and 2.1 million in purchase loans for more than 14.1 million actions. The report revealed that the total number of originated loans of all types and purposes also decreased 12.4 percent or more than 1 million during the period. Refinance originations decreased by more than 33 percent. However, home purchase lending increased by more than 4 percent.

The report indicated that the decline in reporting HMDA data by 13 percent to 5,852 financial institutions was due to “Regulation C changes requiring HMDA collection and reporting from depository institutions only if, in each of the two preceding calendar years, they originated at least 25 home purchase loans, including refinancings of home purchase loans, that are not excluded under 12 CFR.”