On September 29, 2016, the Federal Financial Institutions Examination Council (FFIEC) announced the availability of 2015 mortgage lending data submitted in compliance with the Home Mortgage Disclosure Act (HMDA). This database of mortgage activity is relied upon by regulators, examiners, academics, industry leaders, and members of the general public to analyze the performance of mortgage lenders with regard to compliance with Fair Lending and Community Reinvestment Act (CRA) regulations.

The 2015 HMDA release includes applications, purchases and preapproval requests from 6,913 reporting institutions, which is a decline in institutions of 2.1 percent from 2014. The database covers 12.1 million actions of which 7.4 million were originated home loans. This represents an increase in originations of 23.8 percent from 2014 due largely to a 32 percent increase in conventional refinance loans and a 36 percent jump in FHA home purchase and refinance mortgages.

Following are some observations from a high-level Fair Lending perspective:

  • The ratio of approvals to denials among race and ethnicity prohibited basis groups increased by 9.8 percent from 2.3:1 in 2014 to 2.5:1 in 2015. This trend compares favorably to that of white, non-Hispanic applicants, for which the ratio of approvals to denials increased by 9.7 percent from 3.8:1 in 2014 to 4.2:1 in 2015.
  • The share of applications, excluding purchased loans, from majority-minority areas increased by 15 basis points to 20.57 percent in 2015. With redlining gaining widespread attention, this pattern is something that lenders should continue to monitor.
  • The frequency of high-priced loans (i.e., rate spread reportable loans) among race and ethnicity prohibited basis groups decreased to 8.4 percent in 2015 from 12.3 percent in 2014. This nearly 4 point decrease compares very favorably to that of white, non-Hispanic applicants who saw a more modest 2 percent net decrease to 5.1 percent in the frequency of high-priced loans.

ADI has added this latest HMDA release to our proprietary data warehouse, ADI Data Connect℠. Over the next few weeks, we will share insights and action items for mortgage lenders based on our thorough analysis of the 2015 data, as they relate to a variety of compliance domains.