What is the Home Mortgage Disclosure Act?

The Home Mortgage Disclosure Act (HMDA) is a federal law that requires mortgage lenders and brokers to make certain disclosure information about certain mortgage loans available to the public. It is a law unique to the banking industry and applies to all banks and mortgage lending companies in the state of Tennessee. The purpose of the HMDA is to make the lending process more transparent, helping consumers understand the process, identify potential discrepancies between a lender’s stated policies and its actual practices, and let the public know how lenders are using the money they are lending out. It also provides information to help identify possible discriminatory practices in lending. In order to comply with the HMDA, lenders must provide the public with the Dollar amounts of mortgages originated, the types of mortgages offered, the number of applications made, and the number of denials. The public disclosure must occur on at least a quarterly basis. For consumers, the HMDA can help them understand their options and determine whether a particular lender is treating them fairly in the loan process. It also provides invaluable insight into how lenders are using their funds, helping consumers decide where they should apply for a mortgage loan.

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What is the Home Mortgage Disclosure Act?

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