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Notes on the 2016 HMDA Data and the Avalanche of Data to Come

Things are getting very interesting on the HMDA data front. Near the end of September 2017, the 2016 public HMDA data was released. By April 1, 2018, the 2017 national HMDA database will be made public. A year after that,, the 2018 expanded HMDA data are expected to be released. In a just the span of 18 months, three years of public HMDA data will be released. We expect regulators, enforcement agencies, consumer rights groups, and, hopefully, lenders will make skillful use of these data.

Getting back to the recently released 2016 HMDA data, numerous insights are waiting to be discovered. To pique your curiosity, I will mention a few facts culled from awidely use web-based application.

Lenders grouped by the agency reporter type shows state chartered non-member banks have the largest number of lenders at 2,408 (35.61 percent) but a relatively modest share of applications at only 7.93 percent. The next largest group is credit unions with 1,956 lenders (28.93 percent) and 6.77 percent of applications. Next in line are independent mortgage companies, comprising 891 lenders (13.18 percent) but with the overwhelming largest share of applications at 48.15 percent. Then comes federally chartered national banks and savings banks, numbering 833 lenders (12.32 percent) but with a very small share of applications at 3.57 percent. Bank holding company affiliates and state chartered Fed-member banks regulated by the Federal Reserve system revealed 553 lenders (8.18 percent) and the lowest share of mortgage applications at 2.64 percent. Finally, the smallest number of lenders reporting to the CFPB at only 121 (1.79 percent of all lenders) had the second largest share of applications at 30.94 percent, largely due to their size (lenders with over $10 billion in assets).

Agency Institution Type # Lenders % Total

Lenders

# Applications % Total

Applications

FDIC State chartered non-member banks 2408 35.61% 1,294,623 7.93%
NCUA Credit Unions 1956 28.93% 1,105,859 6.77%
HUD Non-bank independent mortgage cos. 891 13.18% 7,864,560 48.15%
OCC National bank and federal savings banks 833 12.32% 582,896 3.57%
FRS BHC affiliates and State chartered Fed-member banks 553 8.18% 431,256 2.64%
CFPB Any institution type with assets >=$10 billion 121 1.79% 5,053,793 30.94%
Total 6762 100.00% 16,332,987 100.00%

 

The top market for home purchase originated loans for owner-occupied one to four family loans was the Atlanta MSA, followed by Chicago, New York, Houston, and Phoenix. In comparison, the top markets for refinance loans are the Los Angeles; Chicago; Washington, D.C.; Denver; and Riverside-San Bernardino MSAs.

Another key insight shows that there are 299 lenders nationwide that report more than 50 percent of their loans exceeding the APR-APOR threshold for classifying higher cost loans. This threshold is commonly used as a proxy for subprime lending activity. The MSAs with the highest cost lending in 2016 were Houston, San Antonio, Dallas-Plano-Irving, Warren-Troy-Farmington Hills, and Los Angeles. The state with the greatest number of high cost loans was Texas, followed by California, Florida, Alabama, and Louisiana.

Send your questions and comments to me, Michael Taliefero, Managing Director of ComplianceTech, at MTaliefero@ComplianceTech.com.

 

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