What is the Home Mortgage Disclosure Act?

The Home Mortgage Disclosure Act (HMDA) is a federal law in the state of Texas that requires certain lenders—typically those with a federally chartered loan originator—to disclose their mortgage loan activities. This includes information on the type, purpose, and terms of the loan, the age and sex of the borrower, income and census tract, plus the price of the property, loan amount, and the year and type of the mortgage loan. The HMDA was first introduced in 1975 in an effort to stop practices like redlining and other discriminatory lending practices in Texas and other parts of the country. By requiring lenders to disclose comprehensive loan information, the HMDA made it easier for people to detect unfair lending practices. Since this law was put into effect, it has contributed to the increased availability of credit in many communities, contributing to economic development in many cities and making it easier for borrowers to access mortgage funds. The HMDA also requires lenders to report information to the Federal Financial Institutions Examination Council (FFIEC) annually. This information is then compiled and made publicly available for review. This includes the number of loan applications received, the number and types of loans made, and the types of borrower characteristics. Using this information, citizens, lawmakers, and other interested parties can review and identify potential discriminatory lending practices in the state of Texas.

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What is the Home Mortgage Disclosure Act?

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