Welcome to HMDAnalysis, the Economic Justice Project's online tool for analyzing home mortgage lending data made public pursuant to the Home Mortgage Disclosure Act (HMDA). Using HMDAnalysis, you can investigate and analyze home mortgage lending in your community and the lending record of any lender that reports data under HMDA.
One way to use the HMDA data is to evaluate whether banks are satisfying their obligation to meet the credit needs of the local communities under the Community Reinvestment Act (CRA). The CRA places an affirmative obligation on banks to meet local credit needs, and HMDA data can help analyze whether a bank is doing so.
Before you begin using HMDAnalysis, there are a few things you should know about how it works. You should also make a few decisions about what you are looking for. These include:
1. Lender or lenders you are interested in studying: Pick the lender(s) you are interested in studying. HMDA covers lenders that meet an annually adjusted asset threshold as well as home mortgage lenders that are not banks, including mortgage banks and finance companies, as long as they meet certain asset and home mortgage lending volume thresholds. Identifying the exact name of the lender(s) you want to study is not as easy as it might seem. For example, you might be interested in a bank that is chartered by the same name or nearly the same name in many different states. Unless you know the exact name by which the bank is chartered in the state you are interested in, it might be difficult to locate its HMDA data. As another example, a bank in your neighborhood -- even a large bank with many branches -- might not make home mortgage loans at all. Instead, it may have an affiliate or subsidiary that makes home mortgage loans. In addition, when using HMDA data, it is often necessary to have the exact corporate name of the lender, which may differ -- even slightly -- from the commonly known name. Without the exact corporate name, it may be impossible to find the lender's HMDA data. Several websites can help you figure out the exact corporate name, or, in its place, the institution's identification number, which can also be used to find the bank's HMDA data. First is the website of the Federal Financial Institutions Examinations Council, www.ffiec.gov. From there, you can gain access to the websites of the various federal agencies that regulate banks. On these websites, you can find the CRA performance evaluations of banks, which often describe their corporate structure. You can also use the Federal Deposit Insurance Corporation website, www.fdic.gov, or the website of the Securities and Exchange Commission, www.sec.gov.
2. Metropolitan Statistical Area or Metropolitan District in which your community is located: HMDAnalysis is designed to generate reports about home mortgage lending on a metropolitan area basis. Before you begin, you should know the state and the name of the Metropolitan Statistical Area (MSA) or Metropolitan Division (MD) in which your community is located.
3. Year: Lenders report HMDA data on an annual basis. HMDAnalysis is designed to generate reports about HMDA starting with loans lenders made in 2004.
4. Borrower and Neighborhood Characteristics: HMDAnalysis generates reports by the race or income of the applicant or borrower and by the racial composition or median income of the census tract in which the loan is made. (HMDAnalysis does not generate reports using all of the applicant/borrower or neighborhood characteristics that are reported pursuant to HMDA, only some of them.) The characteristics HMDAnalysis employs are, for borrowers (the following borrower characteristics are listed exactly as they are in the HMDA data):
Borrower ethnicity or race:
American Indian/Alaska Native
Asian
Black or African American
Native Hawaiian/Other Pacific Islander
Hispanic or Latino
White non-Hispanic
Borrower income:
Less than 50% of MSA/MD median combined with 50-79% of MSA/MD median
120% or more of MSA/MD median
Census tract racial/ethnic composition:
Less than 10% minority combined with 10-19% minority
80-100% minority
Census tract income level:
Low income combined with Moderate Income
Upper Income
5. Type of loan: HMDAnalysis is designed to generate reports about several different types of loans. These include:
FHA loans, FSA/RHS loans, and VA home purchase loans on 1 to 4 family dwellings and manufactured home dwellings
Conventional home purchase loans on 1 to 4 family dwellings and manufactured home dwellings
Refinance loans on 1 to 4 family dwellings and manufactured home dwellings
Home improvement loans on 1 to 4 family dwellings and manufactured home dwellings
Loans on dwellings for 5 or more families
Subprime conventional home purchase loans, first lien, on 1 to 4 family owner-occupied dwellings (excluding manufactured home dwellings)
HMDAnalysis generates five reports based on these borrower characteristics, census tract characteristics, and loan types. The reports follow a basic format. They measure the bank's performance on a particular criterion and they compare it with a benchmark. The reports are:
1. Loan Application Rate Report: This report measures the percentage of loan applications the lender received from the group(s) you selected, and compares this percentage with the average percentage for all lenders in your metropolitan area. A lender that receives a lower percentage of applications than average is arguably making a weaker effort to attract applications from the group(s)you selected than other lenders. This, in turn, could lead to lower lending rates and explain higher loan denial rates. This report does not distinguish between applications for prime loans and applications for subprime loans because the HMDA data available to the public on the website of the Federal Financial Institutions Examination Council do not make this distinction.
2. Loan Origination Rate Report: This report measures the percentage of the loans the lender made to the group(s) you selected and compares this percentage with the average percentage for all lenders in your metropolitan area. A lender that makes a lower pecentage of loans than average is arguably not meeting the credit needs of the group(s) you selected. This report does not distinguish between prime and subprime loans because the HMDA data available to the public on the website of the Federal Financial Institutions Examination Council do not make this distinction.
3. Loan Denial Rate Ratio Report: This report divides the lender’s denial rate on loan applications from the group(s) you selected by the average denial rate for all lenders in the metropolitan area on loan applications from the same group(s). The result is the denial rate ratio. This ratio shows how the lender treated applications from the group(s) you selected compared with the metropolitan area average for all lenders. Arguably, a lender whose denial rate is higher than average is not treating loan applications from the group(s) you selected equally. This report does not distinguish between prime and subprime loans because the HMDA data available to the public on the website of the Federal Financial Institutions Examination Council website do not make this distinction.
4. Subprime Loan Percentage Report: This report analyzes subprime lending in your community. Ideally, subprime loans go to borrowers with less than perfect credit and charge interest rates adjusted appropriately to compensate for the risk. Many community advocates point to data that show that the subprime lending market does not work ideally, and that African-Americans, Latinos, and residents of predominantly minority neighborhoods receive disproportionately high percentages of subprime loans. This report shows the percentages of subprime and prime loans that the group(s) you selected received and compares these percentages with the percentages the lender made to the corresponding control group(s). The control groups traditionally have not faced lending discrimination.
5. Subprime Loan Origination Ratio Report: (See prior report for description of subprime lending.) This report shows the percentage of all the loans the lender made that were subprime loans to the group(s) you selected and compares this percentage with the average percentage for all lenders in the metropolitan area.
One final point about HMDAnalysis is important. We believe HMDAnalysis will generate useful information about lending that you can use to advocate for more lending in your community that meets community credit needs. However, you can also view HMDAnalysis as a teaching and training tool. As you use HMDAnalysis, you will also learn more about HMDA data and you will be able to figure out other ways to use it. For questions about HMDAnalysis, please contact us at (212) 431-2180 or rmarsico@nyls.edu.