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FHA Lender Handbook Updated, 2013, HMDA Data Released, and New Reporting Regulations Proposed

FHA Handbook: Last week, the Federal Housing Administration issued an updated handbook consolidating its guidance for lenders into a single resource. The updated resource is distinct from FHA’s effort to update its servicing manual. Comments on servicing changes are due Oct. 17. See updated handbook

HMDA Data: In addition, Home Mortgage Disclosure Act data for 2013 is now available at http://www.consumerfinance.gov/hmda/. HMDA data is collected from financial institutions and includes statistics on applications, originations, denials, and loan purchases and sales, and breaks down the type of loan, the secured status of the loan, Census tract characteristics, and other data points. More than 7,000 lenders reported data for 2013, a decrease of approximately 3% from the previous year, with the top twenty-five banks providing 42% of all home loans.

The data is used to enforce fair lending standards and identify lenders who are not providing mortgages in communities of color. In 2013, home purchase lending increased 13% overall. However, home purchase loans to black or Hispanic borrowers decreased slightly while refinance loans to these groups increased slightly. Similarly, home purchase loans to low- or moderate-income borrowers decreased slightly while refinance loans increased.

Federal Housing Administration loans decreased in popularity overall but not with high-income borrowers. In 2013, 25% of high-income borrowers received FHA loans, despite increases in insurance premiums associated with FHA loans. Minority borrowers also disproportionately used government loan programs, including FHA loans.

Proposed HMDA Regulations: The Consumer Financial Protection Bureau proposed new regulations on HMDA data at the end of August (The Dodd Frank Act transferred HMDA rulemaking authority to the CFPB). The proposed regulations seek to expand the types of transactions subject to HMDA reporting as well as the data points regarding each transaction. The proposed rule change is available for comment. Comments are due October 29, 2014. http://www.gpo.gov/fdsys/pkg/FR-2014-08-29/pdf/2014-18353.pdf

For more information, please contact Katherine Porter, Professor of Law, University of California, Irvine at kporter@law.uci.edu

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