On Friday, August 31st, the CFPB issued an interpretive and procedural rule to implement and clarify HMDA changes made by the Economic Growth, Regulatory Relief, and Consumer Protection Act (S.2155).  The rule clarifies many different aspects of S.2155 HMDA implementation in regards to partial exemptions.

On July 26, 2018, the Federal Reserve published its new Consumer Compliance Supervision Bulletin to highlight current issues and share examiners’ observations. At the top of the list was redlining. The fact that redlining was listed first, shows it remains a key concern among regulators.

On August 17th, HUD filed a housing discrimination complaint against Facebook. HUD claims Facebook allows housing-related advertisers to use unlawful preferences and limit housing options through “targeted advertising”. This results in Facebook enabling advertisers to control which users receive ads based on race, color, religion, gender, familial status, national origin, and/or disability — all of which are prohibited under the Fair Housing Act.

Across the United States, housing prices have surpassed their peak reached just before the 2008 financial crisis. Many people take those numbers at face value and shout “Bubble!” However, there are a number of factors explaining why the current market is far from a bubble, and why there is plenty of room for it to grow.

Rising interest rates, record-high home prices, and tighter markets mean applying for a mortgage may be more expensive and more difficult than in the past few years. Not only will borrowers need more income to buy higher priced houses, but lenders will need to find strategic ways to originate loans, while still making a profit.

Fair Lending continues to be a primary focus for regulators. They want to ensure that lenders are providing equal access to credit regardless of race, ethnicity or any other prohibited characteristic. Examiners will often analyze a lender’s HMDA data to determine if there are any gaps in its lending among different demographic areas. Lending performance is often compared to peers in the market in order to assess credit needs and performance context for examiners.

On March 22, 2018, the House of Representatives passed Senate Bill S.2155 commonly referred to as Dodd-Frank Regulatory Relief. While there are many areas of the bill that provide all financial institutions a reason to rejoice, we want to recap what this bill specifically means for HMDA purposes and our customers.

According to the 2017 HMDA data, the number of reporting institutions declined by 13% from 2016 to 5,852. Part of the reason less institutions reported HMDA data was the increase of the reporting threshold made to Regulation C. In 2017, there were 12.1 million home loan applications, which resulted in 7.3 million loan originations, and 2.1 million in purchased loans.

While regulations often have good intentions for consumers, they have noticeably begun to hamstring financial institutions and create complexity for buyers. For example: “In 2006, the average loan file had 302 pages. Now, the average mortgage file is 806 pages,” according to the mortgagereports.com. This is just a small indicator of how regulations have impacted loan origination. Let’s take a look at the origination process and see why it costs so much to originate a loan.

Over the last decade, we’ve seen a tectonic shift in the mortgage industry as we transition to all things digital. A decade ago, the idea of getting a mortgage without stepping into a bank or credit union seemed absurd! Slowly but surely, more and more steps in the mortgage process have become digitalized, as email communication and secure document transfer become more widely accepted and trustworthy.