What is the Home Mortgage Disclosure Act?

The Home Mortgage Disclosure Act (HMDA) is a federal law that helps protect consumers from discriminatory lending practices. It was enacted in 1975 and is enforced by the Federal Reserve Board and state banking regulators. HMDA requires institutions that offer home mortgage loans to make detailed public disclosures of their home loan activity, including loan originations, loan purchases, loan denials, and loan modifications. HMDA is designed to prevent redlining, which is the practice of denying mortgage financing to certain neighborhoods or groups of people based on race, ethnicity, or income. Under HMDA, all institutions that make home mortgage loans are required to submit loan information to a nationwide repository. This information is then made available to the public. The data can be used to look for patterns of discriminatory lending practices or to determine if changes should be made to the lending process. States like Kansas are also required to implement their own Home Mortgage Disclosure laws. Under these laws, lenders must provide customers with certain disclosures, such as an estimated total cost of the loan and a statement of a borrower’s rights in the mortgage process. The Kansas law also requires that lenders provide certain information to customers, such as copies of application forms, loan terms, and settlement documents. Overall, the Home Mortgage Disclosure Act is an important law that helps protect consumers from unfair lending practices. The act provides transparency and allows consumers to make more informed decisions when it comes to home mortgage loans.

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What is the Home Mortgage Disclosure Act?

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