Home Mortgage Disclosure Act

Learn how mortgage lender requirements improve borrowing equality

Congress enacted The Home Mortgage Disclosure Act (HMDA) in 1975. It was later made permanent in 1988 through implementation by Federal Reserve Board Regulation C. Regulation C requires lenders to collect and publicly disclose information about housing-related loans and loan applications. This includes several applicant and borrower characteristics. The purpose of releasing this information is to encourage an equal opportunity lending environment for borrowers and to make sure that each community’s lending needs are adequately taken care of. It can represent a benefit for both the borrower and the lender as it creates an open dialogue about lending practices.

How the Home Mortgage Disclosure Act affects lenders

The mortgage disclosure act requires lenders who meet HMDA reporting criteria to record and distribute information about their lending practices annually.The housing-loan data lenders must disclose under HDMA is as follows:

  • Assist in directing government officials and private investors to areas that may need assistance
  • Help identify a possible pattern of discrimination in lending and assist regulatory agencies as they enforce compliance with antidiscrimination statutes

The Home Mortgage Disclosure Act requires covered institutions to compile and disclose data about applications for, originations of, and purchases of home purchase loans, home improvement loans, and refinancing on a calendar-year basis. Note: Home Equity Lines of Credit (HELOC) are reported at the institution’s option, Citizens Bank has chosen not to report this data.

Learn what information is released with the mortgage disclosure

Mortgage lender requirements state mortgage disclosure data regarding each application or loan as well as applicant or borrower must be recorded in a Loan Application Register (LAR) from the moment an individual loan application is originated. The LAR must comply with mortgage lender requirements set forth by Regulation C. The data recorded extends outside of basic loan information and also includes information on the property and the borrower.

Recorded loan information includes:

  • The type of loan being requested
  • The amount and interest rate of the requested loan
  • The purpose of the loan, i.e. home improvement or home purchase
  • Whether or not a preapproval was given
  • Loan approval determination
  • Disposition of the application, including the reason for disapproval if the loan was not approved
  • Whether or not an approved loan was then sold in the secondary mortgage market

Recorded borrower and property information includes:

  • Details about the property the loan was requested for, including the metropolitan area
  • Demographic information about the borrower including race, ethnicity, gender and income level*
  • Whether or not the borrower intends to occupy the home

*This is collected under the Home Mortgage Disclosure Act to assist the federal government in monitoring the lender’s compliance with The Equal Credit Opportunity, Fair Housing and Mortgage Disclosure Laws. Applicants don’t have to supply their information, but it may benefit them to do so. Keep in mind, the mortgage disclosure act prevents lenders from discriminating against the borrower on the basis of information provided or withheld.

Reporting of mortgage disclosure information

At the end of the year, LARs are released to the Federal Financial Institutions Examination Council (FFIEC). Once data is compiled and reviewed, it is then released to the public. The release of this data creates transparency between the lender and buyer. This helps ensure that mortgage lending is evaluated fairly and mortgages are priced fairly. Given the importance of accurate and timely submission of mortgage disclosure act data, a violation of the reporting requirements may subject the reporting institution to administrative sanctions. This could include the imposition of civil money penalties, where applicable.

Apply for a mortgage at Citizens Bank, an equal housing lender

Citizens Bank is an Equal Housing Lender and reports data annually to the FFIEC as part of Home Mortgage Disclosure Act Requirements.You can learn more about Citizens Bank's mortgage rates and options or apply for a mortgage online today. For additional information, contact a home loan advisor at 1-888-514-2300.


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