Significant changes in the Federal Reserve's requirements have resulted in the reporting and public disclosure of additional data on mortgage loans subject to the Home Mortgage Disclosure Act (HMDA) for the year 2004 and for following years. These data include the "spreads" by which the Annual Percentage Rates (APRs) of certain higher rate mortgages exceed the interest rates of Treasury securities with comparable maturities, the lien status of mortgages, whether mortgages are subject to the Homeownership and Equity Protection Act (HOEPA) and whether they involve a manufactured home. These data are reported along with other required data including the race and gender of loan applicants and borrowers and the locations of properties. While the data now include rate related information, the data themselves do not fully explain why particular borrowers receive particular rates. Specifically, as the federal financial regulators have pointed out, while HMDA data include some relevant pricing factors such as lien status, they exclude many others such as borrower credit history, borrower debt-to-income ratio and loan-to-value ratio.
MBA strongly believes HMDA data reported under these new rules demonstrate the achievements of the industry in putting homeownership in the reach of more borrowers than ever. Loan prices are determined based on credit and other risk related factors, as well as borrower shopping and negotiation, not the race or gender of the borrower.
MBA will continue to provide leadership to educate and inform legislators, key policy makers, regulators, and the public about the appropriate interpretation of the HMDA data and the achievements of the industry. This effort will focus on explaining the pricing of loans and emphasize that as a result of the industry's work, consumers with an unprecedented range of incomes and racial and ethnic backgrounds are for the first time achieving and sustaining homeownership.
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