The Federal Reserve recently released its comprehensive report on banks’ 2007 lending practices that showed that overall mortgage lending dropped sharply. Total originations dropped 25% from 2006 and that nearly one in three applicants were denied. The reports findings are based upon information collected from mortgage lending institutions under the Home Mortgage Disclosure Act of 1975 that includes the geographic location of the properties related to these loans, and demographic and other information about borrowers. The disclosures are intended to help the public determine whether the institutions are servicing the communities housing finance needs but also to assist in the enforcement of the nation’s fair lending laws.
While the system was originally designed for low to moderate income areas and to identify lending to minorities, this act will need to be modified in the future to include age information. Age discrimination is part of fair housing but is not reflective in the mortgage data collected today that can identify institutions and geographic areas that represent concentrations of discriminatory housing pratices based upon age. The data includes information on the Federal Housing Administration (FHA) reverse mortgage program but is lumped into the aggregated FHA data. While information can be ascertained about Reverse Mortgages separately from the HMDA data, what about traditional mortgage products such as conventional, fixed rate loans or home equity loans?
To view the Federal Reserve’s full article outlining its findings on 2007 lending practices, including data break-downs by loan type, geographical regions, and borrower demographics, click here.