FFIEC Announces Availability of 2018 Data on Mortgage Lending
FFIEC announced the availability of 2018 data on mortgage lending transactions at U.S. financial institutions covered by the Home Mortgage Disclosure Act (HMDA). The covered institutions total nearly 5,683 and include banks, savings associations, credit unions, and mortgage companies. The data cover lending activity on or before August 07, 2019 and include 48 data points providing information about the applicants, loan origination, the property securing the loan or proposed to secure the loan in the case of non-originated applications, the transaction, and identifiers. Appendix A of the FFIEC filing instructions guide for HMDA data collected in 2018 contains the complete list of HMDA data points and the associated data fields.
Many of the data points are available for the first time under the HMDA data. The data indicated that approximately 424,000 applications were for commercial purpose loans and approximately 57,000 applications were for reverse mortgages. Overall, credit score information was reported for 73.1% of all applications. Equifax Beacon 5.0, Experian Fair Isaac, and FICO Risk Score Classic 04 were the three most commonly reported credit scoring models at 22.8%, 18.8%, and 18.2% of total applications, respectively. For originated loans, the median primary applicant scores for these three models were between 738 and 746. This compares to medians ranging from 682 to 686 for denied applications. Combined loan-to-value ratio (CLTV) was reported for 74.3% of total applications while debt-to-income ratio (DTI) was reported for 75.3% of total applications. Additionally, the 2018 HMDA contains additional pricing information. It was also reported for the first time in data that indicated approximately 424,000 applications were for commercial purpose loans and approximately 57,000 applications were for reverse mortgages. The data show that the share of mortgages originated by nondepository, independent mortgage companies has increased in recent years.
Overall, the 2018 data include information on 12.9 million home loan applications, with 7.7 million applications resulting in loan origination. The total number of originated loans decreased by about 924,000 between 2017 and 2018, or 12.6%. Refinance origination decreased by 23.1% from 2.5 million and home purchase lending increased by 0.3% from 4.3 million. A total of 2,251 reporters made use of the partial exemptions under the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act for at least one of the 26 data points that are eligible for the exemptions. In all, they account for about 425,000 records and 298,000 origination. The HMDA data is the most comprehensive publicly available information on mortgage market activity. The 2018 HMDA data reflect metropolitan statistical area definitions released by the Office of Management and Budget in 2017 that became effective for HMDA purposes in 2018. HMDA data alone cannot be used to determine whether a lender is complying with fair lending laws. The data do not include some legitimate credit risk considerations for loan approval and loan pricing decisions.
Related Links
Keywords: Americas, US, Banking, HMDA, Reporting, EGRRCP Act, Home Mortgage, Commercial Lending, Credit Risk, Mortgage Lending Loan Origination, FFIEC
Featured Experts
Laurent Birade
Advises U.S. and Canadian financial institutions on risk and finance integration, CCAR/DFAST stress testing, IFRS9 and CECL credit loss reserving, and credit risk practices.
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
Previous Article
EBA Updates List of Common Equity Tier 1 Instruments for EU EntitiesRelated Articles
EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package
EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.
EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway
The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.
PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks
In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.
FSB Sets Out Work Priorities for 2021
In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.
EU Publishes Corrigendum to Revised Capital Requirements Regulation
EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).
ESAs Issue Statement on Application of Sustainability Disclosures Rule
ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).
EC Consults on Crisis Management and Deposit Insurance Frameworks
EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.
HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs
HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.
EBA Proposes Standards for Supervisory Cooperation Under IFD
EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.
BoE Addresses Banks in Scope of First Resolvability Assessment
BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.
