Federal Financial Institutions Examination Council
|For Immediate Release||July 26, 2004|
The Federal Financial Institutions Examination Council (FFIEC) today announced the availability of data for the year 2003 regarding mortgage lending transactions at 8,121 financial institutions covered by the Home Mortgage Disclosure Act (HMDA) in metropolitan statistical areas throughout the nation. These data include disclosure statements for each financial institution, aggregate data for each metropolitan statistical area, and nationwide summary statistics regarding lending patterns. A fact sheet and the nationwide summary statistics are attached to this press release; the following provides a general overview.
The FFIEC prepares and distributes the individual disclosure statements and the aggregate reports on behalf of its member agencies-the Federal Deposit Insurance Corporation, Federal Reserve Board, National Credit Union Administration, Office of the Comptroller of the Currency, and Office of Thrift Supervision-and the Department of Housing and Urban Development. Lenders are required to make the disclosure statements available at their home offices within three business days of receiving the statements. In addition, for other metropolitan statistical areas in which they have offices, lenders must either make a copy of the statements available at one branch per metropolitan statistical area or provide a copy upon written request. The disclosure statements and aggregate reports are now available for public inspection at central depositories throughout the nation.
The HMDA data cover home purchase and home improvement loans and contain information about loan originations, loan purchases, and applications that did not result in a loan. In 2002, the Federal Reserve Board revised Regulation C, which implements HMDA, to require lenders to collect and report additional data on home loans, including loan pricing information, lien status (secured by a first or subordinate lien, or unsecured), and whether a loan or application relates to a manufactured home.1 Lenders must begin collecting these additional data in 2004 for submission by March 1, 2005 and publication in late summer or early fall 2005.
The 2003 data include a total of 42 million reported loans and applications (table 1), which is an increase of about 33 percent from 2002, primarily due to a significant increase in refinancing activity (approximately 41 percent). The number of home purchase loans extended in 2003 compared with 2002 varied by race and ethnicity. From 2002 to 2003, the number of such loans increased 11 percent for whites, 15 percent for blacks, 16 percent for Asians, and 18 percent for Hispanics. Lending to Native Americans fell 5 percent from 2002 to 2003.
From 1993 to 2003, the annual number of home purchase loans to Hispanics rose 236 percent; to Asians, 163 percent; to blacks, 106 percent. Over this same period, lending to Native Americans and whites increased more modestly, 50 percent and 44 percent, respectively. (The period 1993 to 2003 is used because HMDA coverage in 1993 was expanded to include significantly more independent mortgage companies than previously had been covered under HMDA.) Refer to table 7, attached, for year-to-year changes during the period 1993 to 2003.
The number of home purchase loans extended to all income groups increased modestly from 2002 to 2003. Applicants with incomes less than 80 percent of the median for the metropolitan statistical area experienced an increase of 6 percent; applicants with incomes 80-99 percent of the median, 8 percent; applicants with incomes 100-119 percent of the median, 10 percent; and applicants with incomes 120 percent or more above the median, 13 percent. During the 1993 to 2003 period, the number of home purchase loans to applicants with incomes less than 80 percent of the median for the metropolitan statistical area increased by 102 percent; to applicants with incomes 80-99 percent of the median, 70 percent; to applicants with incomes 100-119 percent of the median, 66 percent; and to applicants with incomes 120 percent or more above the median, 88 percent. Refer to table 7 for year-to-year changes during the period.
In 2003, the denial rate for conventional home purchase loans remained the same as in 2002. Denial rates fell from 1999 to 2002, after rising for most of the past decade (information not shown in tables). In 1993, the overall denial rate for conventional home purchase loans was 17 percent; by 1998 this rate had increased to 29 percent. The denial rate fell to 28 percent in 1999; to 27 percent in 2000; to 21 percent in 2001; and to 14 percent in 2002 and 2003.
Denial rates continue to vary among racial and ethnic groups. From 2002 to 2003, denial rates changed modestly for some ethnic and racial groups. From 2002 to 2003, denial rates for conventional home purchase loans fell from 26 to 24 percent for black applicants. Native Americans and Asian applicants experienced a slight rise in denial rates for conventional home purchase loans from 2002 to 2003, from 23 percent to 24 percent, and from 10 percent to 11 percent, respectively. Denial rates for whites and Hispanics remained the same, at 12 percent and 18 percent, respectively.
Changes reflected in the 2000 Decennial Census complicate 2002 to 2003 comparisons of lending in census tracts grouped by racial or income characteristics. In the 2000 Decennial Census, many census tracts experienced changes in physical boundaries and in demographic characteristics. In 2003, for the first time lenders were required to use these changed census tract boundaries to report property location for loans and applications. In 2002, lenders were required to use the 1990 Decennial Census tract boundaries and demographics.
To facilitate comparison of the 2003 data with previous years' data, the 2003 data were adjusted by assigning to the 2000 census tract boundaries their 1990 census tract demographic characteristics (table 8). The adjusted 2003 data show that from 2002 to 2003, census tracts with 80 to 100 percent minority population experienced the greatest increase in home purchase lending, 15 percent; such lending increased 9 percent for census tracts with less than 10 percent minority population; 8 percent for tracts with 10-19 percent minority population and for tracts with 20-49 percent minority population; and 10 percent for tracts with 50-79 percent minority population.
Home purchase lending also varies by the income level of census tracts (table 8). Adjusted 2003 data show that low- and moderate-income census tracts taken together experienced the largest increase, 16 percent, in home purchase lending. Such lending for middle- and upper-income census tracts increased by 9 percent, respectively, from 2002 to 2003, according to the adjusted 2003 data.
In 2003, the proportion of home loan applications missing race or ethnicity data fell for the second consecutive year. This is a reversal of the trend from 1993 to 2001, when the incidence of applications missing race or ethnicity data increased from 8 percent to 30 percent. The proportion of applications lacking the data fell to 17 percent in 2003, down from 28 percent in 2002 (table 9).
The decline in applications missing race and ethnicity data may be due in part to a recent change in reporting requirements. Until January 1, 2003, lenders were not required to request information on an applicant's race or ethnicity and sex when an application was taken entirely by telephone. Because the growth in missing data on race or ethnicity could complicate analyses of changes in home mortgage lending over time, the Federal Reserve Board revised the rule regarding telephone applications. For all applications taken on or after January 1, 2003, lenders are required to ask applicants for race, ethnicity, and sex information in telephone applications. For applications taken in person or by mail or electronic means (such as by facsimile or the Internet), a lender must request the information. In all cases, an applicant has the option not to provide the information.
The location of the central depository for a metropolitan statistical area can be obtained by calling the FFIEC at 703/516-5588. The FFIEC distributes the disclosure statements to institutions and central depositories in electronic form only. In addition, the FFIEC makes HMDA data directly available to the public in CD-ROM format and at the FFIEC web site (www.ffiec.gov/hmda). An order form gives descriptions of the various reports, prices, and formats. It is available for printing from the FFIEC web site (www.ffiec.gov/hmda/orderform.htm). Advance orders will be filled when the data become available.
The HMDA data also include information on loans that are sold, showing the type of purchaser of the loan. Among other things, the Department of Housing and Urban Development (HUD) uses this information in assessing the performance of Fannie Mae and Freddie Mac in meeting their legislatively mandated affordable housing goals.
The FFIEC also provides data from the nation's seven private mortgage insurance (PMI) companies. The 2003 PMI data include information on approximately 2.9 million applications for mortgage insurance; about 1.5 million applications were to insure home purchase mortgages, and about 1.4 million were to insure mortgages to refinance existing obligations. By August, these data will be available-at individual PMI companies, at the central depositories in each metropolitan statistical area, and from the FFIEC-in the same types of reports and in the same formats as the HMDA data.
Questions about a HMDA report for a specific lender should be directed to the lender's supervisory agency at the number listed below:
Federal Deposit Insurance Corporation - 877/275-3342; hearing impaired - 800/925-4618
Federal Reserve Board, HMDA Assistance Line - 202/452-2016
National Credit Union Administration, Office of Examination - 703/518-6360
Office of the Comptroller of the Currency, Compliance Division - 202/874-4428
Office of Thrift Supervision, Consumer Programs - 202/906-6315
Department of Housing and Urban Development, Office of Housing - 202/755-7530.
1. 67 FR 7222 (Feb. 15, 2002); 67 FR 43218 (June 27, 2004).
The FFIEC was established in March 1979 to prescribe uniform principles, standards, and report forms and to promote uniformity in the supervision of financial institutions. The Council has five member agencies: the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. The Council's activities are supported by interagency task forces and by an advisory State Liaison Committee, comprised of five representatives of state agencies that supervise financial institutions.