CFPB Provides Details on Proposed HMDA Reporting Changes
The Consumer Financial Protection Bureau issued a proposal Thursday that would require lenders to disclose more information about mortgages, including the age and credit score of homebuyers, the property value and interest rate details.
Currently, publicly released Home Mortgage Disclosure Act data is primarily broken down by geography, race, gender and whether the applicant was approved. But the Dodd-Frank Act required the CFPB to expand the amount of HMDA information in an effort to gain a better understanding of the mortgage market.
"It is critical that we shed more light on the mortgage marketóthe largest consumer financial market in the world," said CFPB Director Richard Cordray in a press release. "Todayís proposal would help us understand better how to protect consumersí access to mortgage credit while simplifying the reporting requirements for financial institutions."
The agency's proposal seeks to require lenders to disclose pricing and more information about the underwriting, including an applicant's debt-to-income ratio and the total discount points charged.
This data would help the agency determine the impact of its so-called qualified mortgage rule that was implemented in January, the agency said. The rule requires loans to meet certain underwriting criteria in return for greater legal protections.
The CFPB proposal would also expand the amount of information lenders must provide about adjustable-rate mortgages and non-amortizing loans that were key contributors to the financial crisis.
The plan would also require lenders to report other forms of financing for residential dwellings such as reverse mortgages and open-end lines of credit.
Though the proposal would likely require some additional work for lenders, the CFPB also sought a myriad of changes to streamline the process. That included potentially allowing lenders that are already reporting similar data to the secondary market to apply the same definitions to data in the HMDA system.
The agency is also looking at excluding small banks from having to report HMDA data if they make fewer than 25 mortgages a year and leveling the playing field with non-depository institutions.
The CFPB has proposed that both depository institutions and non-depository must report HMDA data if they make at least 25 closed-end loans or reverse mortgages in a year. Currently, depository institutions must report regardless if they make only one such loan in a year while non-depository lenders donít have to report until they make at least 100 loans a year.
The proposal is open for comment through Oct. 22.