Home Mortgage Disclosure Act -- Understand Your Rights

Gabriel Traverso
LoanBiz Columnist

Article Rating , 4 out of 5 based on 1 votes

Mortgages are regulated not only by the Truth in Lending Act, but also by the Home Mortgage Disclosure Act. Understanding your rights as a homeowner can ease the frustration of buying a new home.

Home Mortgage Disclosure Act

The Home Mortgage Disclosure Act was ratified in 1975. It requires all financial institutions to maintain and annually disclose data about home purchases, mortgage pre-approvals, and mortgage refinance applications. The Home Mortgage Disclosure Act was created to:

  • Ensure that lenders are serving the housing needs of their community
  • Identify where and if there are discriminatory lending practices

When you're applying for a new home loan, home equity loan or refinancing you will probably deal with a lender (those with assets exceeding$33 million) covered by the HMDA.

How does the Home Mortgage Disclosure Act Protect You?

The Home Mortgage Disclosure Act helps the federal government identify financial institutions that use discriminatory lending practices. When applying for your home loan, the HMDA has already done some work for you by ensuring your lender has not turned down previous mortgage applications based on race or gender or if they have a history of charging minorities higher rates or fees on their loans.

Mortgage Homework

Although the government has created guardrails for consumers through the Truth in Lending Act and the Home Mortgage Disclosure Act, you still need to research your mortgage loan and make sure that it fits your needs and that it is fairly priced. Understanding your rights as set forth in these acts will make you a more confident and informed home buyer, but at the end of the day it is your responsibility to make sure that you've chosen a mortgage that fits your needs. In the long run, it's competition for your business that will keep lenders offering good products and pricing them fairly.

About the Author
Gabriel Traverso is a freelance writer, professional musician, and artist. He resides with his family in Reno, NV.

Editor's Selections: Additional Reading
Related Articles & Tools
Quick Survey

Your answer: 
Correct answer: 

Total votes: 

Mortgage Industry Update Keep up with the latest industry buzz.

Email this article

Please fill in a valid name.
Please fill in a valid e-mail.
Please fill in a recipient name.
Please fill in a valid recipient e-mail.
Email loading...