Home Mortgage Disclosure Act (HMDA)
Congress enacted the Home Mortgage Disclosure Act (HMDA) in 1975. On July 21, 2011, the rule-writing authority was transferred to the Consumer Financial Protection Bureau (CFPB). This regulation provides the public access to loan data that helps ensure equality of housing and financial assistance.
It is believed that some financial institutions were the cause of the decline in many geographic areas by not providing adequate home financing with reasonable terms and conditions to qualified applicants. Financial institutions focused on higher quality neighborhoods and neglected to provide service to those in need in certain urban areas. To prevent this from occurring and discriminatory practices from continuing, HMDA was developed.
It is important to show and encourage equality in the housing and financial markets and HMDA helps bring any discriminatory lending practices to light. Every year, a report on trends is published and available to the public. Why is this important to you as a consumer? As a consumer, you can expect that your mortgage loan will be treated with the same care no matter what your situation.