What is the Home Mortgage Disclosure Act?

The Home Mortgage Disclosure Act (HMDA) was enacted by the United States Congress in 1975 and is enforced by the Federal Reserve Board. The act is designed to encourage lending institutions to make credit available to all segments of the community, including people of all income levels, races, and ethnic groups. In Nebraska, HMDA requires lenders, such as banks, credit unions, savings and loan associations, and mortgage companies, to collect data about the characteristics of the mortgages they originate and purchase. This information includes the type of loan (purchase, refinance, etc.), the property type (single-family, multi-family, etc.), interest rate, and the race, sex, and income of the borrowers. The Federal Reserve Board publishes the data obtained under the HMDA on a periodic basis. This information is then used by the public to evaluate lending practices and to identify possible discriminatory practices in the mortgage banking industry. It also helps financial institutions evaluate how they serve the credit needs of their communities. The HMDA also requires lenders to make annual public disclosures of the data they reported to the Federal Reserve Board. This data is available in either written or electronic form, and it allows the public to monitor lenders’ lending practices. The data provides important information to consumer groups, financial analysts, researchers, government agencies, and other interested parties. Overall, the Home Mortgage Disclosure Act provides the public with the tools to monitor and evaluate the lending practices of financial institutions in the state of Nebraska. The information gathered helps to ensure fair lending practices and discourage discriminatory practices.

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What is the Home Mortgage Disclosure Act?

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