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Financial Services Law Insights and Observations

CFPB releases HMDA data report

Federal Issues CFPB HMDA Dodd-Frank Mortgages Consumer Finance

Federal Issues

On August 19, the CFPB released a Data Point report titled, 2020 Mortgage Market Activity and Trends, which finds that the total number of closed-end originations, as well as applications, increased substantially between 2019 and 2020. The 2020 HMDA data encompasses the third year of data that incorporates amendments to HMDA by Dodd-Frank. The changes include new data points, revisions to some existing data points, and authorizing the CFPB to require new data points. As covered by a Buckley Special Alert, the CFPB issued a final rule that implemented significant changes that reflected the needs of homeowners and the evolution in the mortgage market.

According to the report, trends in mortgage applications and originations found in the 2020 HMDA data point include:

  • 4,472 financial institutions reported at least one closed-end record in 2020, which is a decrease from 5,505 in 2019;
  • “The number of home-purchase loans secured by site-built, one-to-four-family properties increased by about 387,000, whereas the number of refinance loans increased by 149.1 percent from 3.4 million in 2019 to 8.4 million in 2020”;
  • In 2020, the number of open-end line-of-credit originations, besides reverse mortgages, fell by 16.6 percent to 869,000, from 1.04 million in 2019;
  • “The share of loans secured by closed-end home-purchase loans for site-built, one-to-four-family, first lien, principal-residence properties for Black borrowers increased in 2020 and the share of refinance loans for Asian borrowers increased in 2020”; and
  • In 2020, the refinance boom largely continued the trends since the second quarter of 2019.

According to CFPB Acting Director Dave Uejio, “initial observations about the nation’s mortgage market in 2020 are welcome news, with improvements in the overall volume of home-purchase and refinance loans compared to 2019.” He also noted that “Black and Hispanic borrowers continued to have fewer loans, [are] more likely to be denied than non-Hispanic White and Asian borrowers, and pay higher median interest rates and total loan costs. It is clear from that data that our economic recovery from the COVID-19 pandemic won’t be robust if it remains uneven for mortgage borrowers of color.”