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9 Key Observations from the 2013 HMDA Data By The Numbers

4 min read
Jul 24, 2020

Earlier this week, the Federal Reserve Board released findings from their analysis of the 2013 HMDA data. This analysis provides key insights. We've compiled some of those key insights into a quick, easy-to-read "By The Numbers" summary. Check it out:

The Federal Reserve Board recently released their analysis of the 2013 Home Mortgage Disclosure Act Data, contextualized with data gathered since 2004. Some of the official reasons for the public release of HMDA data are that it helps the public determine whether financial institutions are adequately serving the housing needs of their communities, identify potential discriminatory lending patterns, and enforce anti-discrimination legislations.

The FRB's analysis of the public HMDA data provides insight into the data and trends, highlighting both what the regulators are seeing in the data and how they're seeing it. 

We've gathered 9 of these key observations from the Federal Reserve report into a "By the Numbers" summary to make the statistics easy to read and understand. Let's jump in. 

1. In 2013, 7,190 financial institutions reported data on approximately 14 million home mortgage applications, according to the Federal Reserve Board bulletin.

Roughly 8.7 million applications resulted in originations, while 1.9 million were closed by the lender or withdrawn by the applicant before a decision was made.

Additionally, more than 2,615 of the 7,190 reporting institutions originated fewer than 100 mortgages in 2013With the proposal for HMDA Plus, and the changing reporting thresholds, these numbers may decrease even more.

2. The number of loan originations decreased about 11 percent in 2013, from about 9.8 million originations in 2012 to 8.7 million in 2013.

The Federal Reserve bulletin attributes this decrease to a 23 percent drop in refinance mortgages for one-to-four-family properties in 2013.

That sharp decrease was offset by a 13 percent increase in one-to-four-family home-purchase originations in 2013. The bulletin does note that purchase originations were historically low in 2013, lower than all levels since 1993. 

3. The number of home purchase originations grew from 2.7 million to 3.1 million from 2012 to 2013.

Roughly 70 percent of conventional (i.e. not government-backed) home-purchase loans were taken out by white non-Hispanic borrowers. Hispanic borrowers took out 7.3 percent of the home purchase loans in 2013, while Asian borrowers took out 5.7 percent and black borrowers took out 4.8 percent. 

4. The government-backed share of first-lien home-purchase loans declined to 38 percent of total applications in 2013 from 45 percent in 2012. That is down from a peak of 54 percent in 2009.

This decline in the share of nonconventional, or government-backed, first-lien home-purchase loans is due to a decrease in the FHA share of loans, according to the bulletin. This is attributed in part to increases in mortgage insurance premiums (MIPs) that the FHA charges borrowers, it added. Home-purchase loan rates varied widely across states.

5. Approximately 71 percent of black and 63 percent of Hispanic home-purchase loans were government-backed in 2013. 

Blacks and Hispanics are much more likely to use nonconventional, or government-backed, loans than conventional loans when compared to other groups, the bulletin states. About 35 percent of non-Hispanic white borrowers, and only 16 percent of Asian borrowers, took out a nonconventional home-purchase loans.

6. Black borrowers’ share of home-purchase loans, both conventional and nonconventional, dropped to 4.8 percent in 2013. This is down from 5.1 percent in 2012 and 8.7 percent in 2006.

Simultaneously, white non-Hispanic borrowers' share of home-purchase loans roase to 70.2 percent, up from 61.2 percent in 2006. The total number of home-purchase loans increased approximately 30 percent from 2011 to 2013.

7. Home-purchase loans to LMI borrowers were just 28.4 percent of the total in 2013, down from 33.4 percent in 2012.

Despite an increase in the total number of home-purchase loans, the number of loans to LMI borrowers declined slightly from 2012, the report added.

8. The overall denial rate for conventional and non-conventional home-purchase loans in 2013 was 14.5 percent, roughly the same as 2012. However the 2013 refinance loan application denial rate rose to 22.7 percent from 19.8 percent in 2012.

These rates have varied significantly since 2006, the report states. These swings may be a result of changes in credit standards, demand for credit, and the demographics of mortgage applicants.

In 2013, black applicants were more than twice as likely to be denied as white applicants, with a 25.5 percent and a 12.2 percent denial rate, respectively. Historically, this difference is pretty consistent.

9. The conventional home-purchase denial rate for black applicants was about 29 percent, while for white non-Hispanic applicants it was 11 percent.

The report noted that these differences in denial rates are related to credit risk-related factors, including credit scores. Credit history was listed as a denial reason in almost a third of black applicants, and almost a quarter of Hispanic applicants, it said.

Ncontracts Viewpoint: This public release of HMDA data provides the potential for great insight. At Ncontracts, we work with our clients to analyze their data and understand what it says about their institutions. We find that awareness of overall market trends and statistics helps our clients contextualize and enhance understanding of data. 


Related: How to Build a Strong Fair Lending & Redlining Compliance Management System



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