Understanding the Home Mortgage Disclosure Act

Allison Beatty
LoanBiz Columnist


The Home Mortgage Disclosure Act provides a public record of community lending. This information can be useful to you if you want to investigate home-ownership rates, or track the lending record of an individual lending agency.

Home Mortgage Disclosure Act Defined

The Home Mortgage Disclosure Act requires many mortgage lenders to collect data about their home loan lending activity. (Some consolidation loans and loans outside of metropolitan areas are not covered). This mortgage information must be reported to the government and be available for public review. Among the information required to be disclosed are:

• The location of the loans
• Information about any applications that were denied
• The ethnicity of the borrower
• Whether the home loan was completed

Expanding the Home Mortgage Disclosure Act

The act was expanded in 1989 to require disclosure of race, sex, and income of the borrower. While the act does not prohibit any mortgage-lending activity, it brings detailed lending activity into the public domain, where it can be scrutinized.

Benefits of the Home Mortgage Disclosure Act

The act is designed to bring valuable lending information out into the open, where it can be reviewed and challenged, if necessary. Those who are concerned about discrimination or a lender's record of loaning to certain communities can find detailed information to review.

Will It Prevent Mortgage Lending Discrimination?

Home loan disclosure is a boost to agencies' efforts to prevent discrimination. It also helps investors and public agencies to research and plan housing investments in certain neighborhoods.

The Home Mortgage Disclosure Act is a valuable tool for keeping track of community lending. If you have concerns about home ownership rates in a particular community, or simply want to track the number and types of home loans being completed, the information should be available for your review.

Source
FDIC

About the Author
Allison E. Beatty is a syndicated real estate writer who has been writing home improvement columns for 15 years.