Home Mortgage Disclosure Act -- Understand Your Rights
Gabriel TraversoLoanBiz Columnist
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.
