WASHINGTON – The Federal Financial Institutions Examination Council (FFIEC), of which NCUA is a member, has announced the availability of data on 2020 mortgage lending transactions at 4,475 U.S. financial institutions reported under the Home Mortgage Disclosure Act (HMDA).
Covered institutions include banks, savings associations, credit unions, and mortgage companies.
The FFIEC said it has released several data products to serve a variety of data users, including:
- The HMDA Dynamic National Loan-Level Dataset is updated, on a weekly basis, to reflect late submissions and resubmissions.
- The Snapshot National Loan-Level Dataset contains the national HMDA datasets as of a fixed date, in the case of 2020 data, May 1, 2021.
- Aggregate and Disclosure Reports provide summary information on individual financial institutions and geographies.
- The HMDA Data Browser allows users to create custom tables and download datasets that can be further analyzed.
In addition, beginning in late March 2021, the FFIEC noted it made available Loan/Application Registers for each HMDA filer of 2020 data, modified to protect borrower privacy.
Understanding the Data
The FFIEC said the data include a total of 48 data points providing information about the applicants, the property securing the loan or proposed to secure the loan in the case of non-originated applications, the transaction, and identifiers.
A complete list of HMDA data points and the associated data fields is found in the FFIEC’s Filing Instructions Guide for HMDA Data Collected in 2020. Certain smaller-volume financial institutions are not required to report all of these data, pursuant to the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).
The 2020 HMDA data use the census tract delineations, population, and housing characteristic data from the 2011–2015 American Community Survey (ACS). In addition, the data reflect metropolitan statistical area (MSA) definitions released by the Office of Management and Budget in 2018 that became effective for HMDA purposes in 2019.
The FFIEC noted HMDA data comparisons across multiple years are limited by changes in HMDA definitions, values, and thresholds. In addition, comparisons for certain geographic areas are limited due to the changes in MSA and census tract boundaries and updates to the population and housing characteristics of census tracts, especially those that follow the decennial census and five-year updates based on the ACS data.
Observations from the 2020 Data
According to the FFIEC, during 2020 the number of reporting institutions declined by about 18.8% from the previous year to 4,475. One reason for the change is that, in 2020, the Bureau issued a final rule amending Regulation C to increase the threshold for collecting and reporting data about closed-end mortgage loans from 25 to 100 loans, effective July 1, 2020.
The Findings
The 2020 data include information on 22.7 million home loan applications. Among the findings:
- 20.4 million were closed-end, 1.7 million were open-end, and, for another 563,000 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 63.2%, and the number of open-end line of credit applications decreased by 19%. A total of 14.5 million applications resulted in loan originations. Among them, 13.2 million were closed-end mortgage originations, 906,000 were open-end line of credit originations, and, pursuant to the EGRRCPA’s partial exemptions, 432,000 were originations for which financial institutions did not indicate whether they were closed-end or open-end.
- The 2020 data include 2.8 million purchased loans, for a total of 25.6 million records. The total also includes information on approximately 129,000 preapproval requests that were denied or approved but not accepted.
- The total number of originated closed-end loans increased by about 5.3 million between 2019 and 2020, or 67.1%.
- Refinance originations for 1-4 family properties increased by 150% from 3.4 million, and home purchase lending increased by 6.7% from 4.5 million.
- A total of 1,637 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 589,000 records and 439,000 originations.
- From 2019 to 2020, 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% of area median income) increased slightly from 28.6% to 30.4%, 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 23.8% to 19.3%.
Race & Ethnicity Data
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 7.0% in 2019 to 7.3% in 2020, the share made to Hispanic-White borrowers decreased slightly from 9.2% to 9.1%, and those made to Asian borrowers decreased from 5.7% to 5.5%, the data show.
From 2019 to 2020, the share of refinance loans for first lien, 1-4 family, site-built, owner-occupied properties made to Black borrowers decreased from 5.3% to 4.3%, the share made to Hispanic-White borrowers decreased from 6.2% to 5.3%, and the share made to Asian borrowers increased from 5.4% to 6.7%.
In 2020, Black and Hispanic-White applicants experienced denial rates for first lien, 1-4 family, site-built, owner-occupied conventional home purchase loans of 17.2% and 11.2% respectively, while the denial rates for Asian and non-Hispanic-White applicants were 9.1 and 6.1 respectively.
Similar Findings
“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 organization stated.