Information gathered and made publically available pursuant to the Home Mortgage Disclosure Act (“HMDA”) is the most comprehensive publicly available information on mortgage market activity.
HMDA was enacted in 1974 and grew out of public concern over credit shortages in certain urban neighborhoods. Congress believed that some financial institutions had contributed to the decline of some geographic areas by their failure to provide adequate home financing to qualified applicants on reasonable terms and conditions. Thus, one purpose of HMDA and related regulations is to provide the public with information that will help show whether financial institutions are serving the housing credit needs of the neighborhoods and communities in which they are located.
As the name implies, HMDA is a disclosure law that relies upon public scrutiny for its effectiveness. It does not prohibit any specific activity of lenders, and it does not establish a quota system of mortgage loans to be made in any Metropolitan Statistical Area (MSA) or other geographic area as defined by the Office of Management and Budget.
US financial institutions must report HMDA data to their regulator if they meet certain criteria, such as having assets above a specific threshold. The number of financial institutions submitting HMDA data in 2014 was 7062, down from 7,923 in 2010.