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3 Ways to Use Your HMDA Data

Nov 30, 2017 by Brian Arnesen

Home Mortgage Disclosure Act (HMDA) data is made public every year by the CFPB. Anyone can access this data from the CFPB’s website approximately six months after it is submitted by institutions (though that time frame will be shortening soon). Over 16 million records were submitted to the CFPB in 2016— making HMDA data a goldmine for regulators, institutions, and public advocacy groups.

cfpb data goldmineDigging through the data yourself can often be tedious if you do not know what you are looking for. However, there are tools such as QuestSoft’s Market Data module that can extrapolate the information from the HMDA data for insights into an institution’s performance and allow institutions to improve their lending performance.

Here's what to do with public HMDA data:

1. Fair Lending Analysis

As we have been saying for a while now, the expanded HMDA data collection makes it easy for examiners to perform an instant Fair Lending analysis. Whether your institution is subject to the Community Reinvestment Act (CRA) or not, every institution can use their HMDA data to analyze their lending patterns to discover gaps in their lending or uncover any demographics that may have been overlooked while making lending decisions. Using HMDA data to evaluate Fair Lending regulations is exactly how examiners and advocacy groups will judge your institution. Your HMDA data will be compared to all of your peers, so it’s important that you know what story your data tells.

2. Competitor Research

The benefit of HMDA data is that your competitors must also submit their mortgage data and that data is public. You can use this data to compare yourself to your peers and to see what your competition has been engaged in over the previous year. You can compare your loan applications, originations, denial rates and many other data fields. This will allow you to see areas for improvement and growth. QuestSoft’s Market Data module for Compliance RELIEF will automatically create comparison reports for you. Whether you want to see your market “penetration rates” in LMI census tracts and compare them to your competition or just a synopsis of your banks performance, each report is custom tailored to your institution.



3. Prepare for Next Year

Now that you’ve analyzed your data and compared it to your peers’, you can now plan for next year. HMDA data can allow you to identify new lending opportunities. Maybe you need to open a new branch in a different census tract or perhaps you are behind the market on refinances; the public HMDA data will give your institution valuable insight for the next year.

As more processes become automated and data collection increases, it is now easier than ever to analyze an institution’s performance and uncover regulatory violations within seconds. Institutions that effectively leverage their HMDA data will not only please regulators and shareholders, but will also be able to enhance their product offerings to customers, creating an overall business strategy where everyone wins.

Start analyzing your lending performance today by activating QuestSoft’s Market Data module within  Compliance RELIEF