On 6/24/2020, the Federal Financial Institutions Examination Council (FFIEC) announced the availability of the 2019 HMDA data for 5,508 U.S. financial institutions. This data is used by the industry, consumer groups, regulators, and others to assess potential fair lending risk and for other purposes. In their release, the FFIEC pointed out a few observations as follows:
“For 2019, the number of reporting institutions declined by about 3 percent from the previous year to 5,508. The 2019 data include information on 15.1 million home loan applications. Among them, 12.5 million were closed-end, 2.1 million were open-end, and, for another 442,000 records, pursuant to the EGRRCPA’s partial exemptions, financial institutions did not indicate whether the records were closed-end or open-end. The number of closed-end loan applications increased by 21 percent, and the number of open-end line of credit applications decreased by 9 percent. A total of 9.3 million applications resulted in loan originations. Among them, 7.9 million were closed-end mortgage originations, 1.1 million were open-end line of credit originations, and, pursuant to the EGRRCPA’s partial exemptions, 335,000 were originations for which financial institutions did not indicate whether they were closed-end or open-end. The 2019 data include 2.3 million purchased loans, for a total of 17.5 million records. The data also include information on approximately 151,000 preapproval requests that were denied or approved but not accepted.
The total number of originated closed-end loans increased by about 2 million between 2018 and 2019, or 26 percent. Refinance originations for 1-4 family properties increased by 78 percent from 1.9 million, and home purchase lending increased by 4 percent from 4.3 million. 3
A total of 2,494 reporters made use of the EGRRCPA’s partial exemptions for at least one of the 26 data points eligible for the exemptions. In all, they account for about 641,000 records and 330,000 originations.
From 2018 to 2019, the share of home purchase loans for first lien, 1-4 family, site-built, owner-occupied properties made to low- or moderate-income borrowers (those with income of less than 80 percent of area median income) increased slightly from 28.1 percent to 28.6 percent, and the share of refinance loans to low- and moderate-income borrowers for first lien, 1-4 family, site-built, owner-occupied properties decreased from 30 percent to 23.8 percent. 4
In terms of borrower race and ethnicity, the share of home purchase loans for first lien, 1-4 family, site-built, owner-occupied properties made to Black borrowers rose from 6.7 percent in 2018 to 7.0 percent in 2019, the share made to Hispanic-White borrowers increased slightly from 8.9 percent to 9.2 percent, and those made to Asian borrowers decreased from 5.9 percent to 5.7 percent. From 2018 to 2019, the share of refinance loans for first lien, 1-4 family, site-built, owner-occupied properties made to Black borrowers decreased from 6.2 percent to 5.3 percent, the share made to Hispanic-White borrowers decreased from 6.8 percent to 6.2 percent, and the share made to Asian borrowers increased from 3.7 percent to 5.4 percent.
In 2019, Black and Hispanic-White applicants experienced higher denial rates for first lien, 1-4 family, site-built, owner-occupied conventional home purchase loans than non-Hispanic-White applicants. The denial rate for Asian applicants is more comparable to the denial rate for non-Hispanic-White applicants. These relationships are similar to those found in earlier years and, due to the limitations of the HMDA data mentioned above, cannot take into account all legitimate credit risk considerations for loan approval and loan pricing.
The Federal Housing Administration (FHA)-insured share of first-lien home purchase loans for 1-4 family, site-built, owner-occupied properties increased from 19.3 percent in 2018 to 20.2 percent in 2019. The Department of Veterans Affairs (VA)-guaranteed share of such loans increased slightly to 10.6 percent in 2019. The overall government-backed share of such home purchase loans, including FHA, VA, Rural Housing Service, and Farm Service Agency loans, was 33.4 percent in 2019, up from 33 percent in 2018.
The FHA-insured share of refinance mortgages for first lien, 1-4 family, site-built, owner-occupied properties decreased slightly to 12.0 percent in 2019 from 12.8 percent in 2018, while the VA-guaranteed share of such refinance loans increased from 10.2 percent in 2018 to 13.5 percent in 2019.
The share of mortgages originated by nondepository, independent mortgage companies has increased in recent years. In 2019, this group of lenders accounted for 56.4 percent of first lien, 1-4 family, site-built, owner-occupied home-purchase loans, slightly down from 57.2 percent in 2018. Independent mortgage companies also originated 58.1 percent of first lien, 1-4 family, site-built, owner-occupied refinance loans, an increase from 56.1 percent in 2018.
The HMDA data also identify loans that are covered by the Home Ownership and Equity Protection Act (HOEPA). Under HOEPA, certain types of mortgage loans that have interest rates or total points and fees above specified levels are subject to certain requirements, such as additional disclosures to consumers, and also are subject to various restrictions on loan terms. For 2019, 6,507 loan originations covered by HOEPA were reported: 3,253 home purchase loans for 1-4 family properties; 442 home improvement loans for 1-4 family properties; and 2,812 refinance loans for 1-4 family properties.”
The full FFIEC release can be found here.
