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5 Reasons to Love Your HMDA Data & Analysis!

4 min read
Feb 13, 2019

 Tomorrow is Valentine's Day! In the spirit of the holiday, we're excited to share five real reasons to love your HMDA data. Since HMDA submission is just around the corner, now is an extra-important time to show that data some love.

It's that time of year again...cupids, roses, lots of candy, and everything pink! Whether you love Valentine's Day or hate it, the holiday does provide a chance to reflect on who and what you love. Something that could use a little extra love this year? Your HMDA data.

Here are five real reasons to love your HMDA data in 2019.

As we talked about in yesterday's webinar "5 Trends Shaping Compliance in 2019," HMDA is one of the areas of compliance driving the most change. HMDA compliance is complex, and it’s putting additional pressure on compliance pros like you.

In fact, 17% of surveyed compliance professionals listed HMDA as their top-most priority in 2019, according to the 2018 Compliance Pulse Report.

However, it seems like HMDA is sparking more stress than affection lately. We completely understand why; with all the changing HMDA requirements, it can be a real challenge. Specifically, these HMDA changes can mean more responsibilities and more risk. As we wrote about recently, the first quarter in particular is challenging for compliance teams.

If you're reading this, you are probably well aware of the challenges associated with collecting, monitoring, analyzing, and submitting HMDA data. On the flip side, there are really good reasons to be appreciative of it. Here are five reasons to love your HMDA data:

1. The HMDA Plus Data Provides Deeper Analysis and Insights

First, gathering the additional data can help provide deeper analysis and insights about your business. It's not just about risk monitoring; HMDA analysis can help you understand where potential customers are "falling out" of the sales cycle. You can then use this data to help improve your process and serve more of those qualified consumers.

Some customers analyze their HMDA data using Ntransmittal compliance software to gain not only compliance clarity, but marketing and sales insights.

Get this case study to learn how one customer uses Analytics to reveal marketing insights, and how you can, too:

The public data, which also will have more depth, can provide competitive insights, but we'll talk more about that later.

2. No More (Or At Least, A Lot Less) File Diving

If you've been involved with HMDA compliance in years past, you know that digging through loan files to identify risk was a part of the process.

With the expanded HMDA data, you can kiss that goodbye. The depth and breadth of the new data means no more file diving! Or at least, a lot less. 

This is because the data has almost all of the fields we need to see the core issues. In addition, the TRUPOINT Analytics software has channel analysis, which helps us with the more complexed observations.

If you do need to compare files, know that some software solutions (like Analytics) do include built-in comparative file review. You can see a little more in the image below:


Additionally, Ntransmittal also offers a Credit Analysis bar. This helps you review key underwriting factors, which also helps to cut down on the number of files to look at. (If you're interested in a free demo, you can get one here.)

3. Reduce Risk of Discrimination Proactively

In all our years in compliance, we've never heard a financial institution say they wanted to discriminate. That's just not the goal. Rather, the goal is often to make good loans that will help grow the business - and the community. 

However, we know that disparities do exist and discrimination can occur, even unintentionally. Because of the depth of the HMDA data, it presents a really wonderful opportunity to address any Fair Lending risk proactively.

In addition, Fair Lending analysis can turn up CRA and Redlining risks. This means that you can do a better job of proactively addressing risks in those areas, too.

4. Keep An Eye On Your Competitors

This has been a topic of much scrutiny lately: how much competitive insight can people really gain from the expanded HMDA data? While this is still evolving, it's true that the additional HMDA data does provide financial institutions the opportunity to clearly and accurately benchmark themselves against peers and competitors. It's almost like being able to spy on your competition!

For example, you can learn which groups are being best served in your community, or understand what percentage of the market share other financial institutions have. 

These are just two of the potential insights you can gain, but there are many more. 

Want a free HMDA benchmark report? You can get one here!

5. Tell a Clearer Story about Your Performance

Finally, you will be able to tell an even clearer and more compelling story about your institution using your data. Allegations of discrimination might not be supported by the data, and you'll also be able to see where you're performing well compared to others in your market.

These insights can also present an opportunity to share some good PR about your financial institution, and the work you're doing to support the community or communities you serve. 

In the event that a media organization or community group comes knocking, you'll also have all the data you need to truly understand the story your data tells, and convey that to them.

Ncontracts Viewpoint: The changing Home Mortgage Disclosure Act requirements do present real challenges, but this data also presents opportunities. As you celebrate Valentine's Day tomorrow, consider giving a little extra love to HMDA compliance. 

Know that Ncontracts is here to help. From analysis software to submission tools, and even consulting, we have solutions designed to meet your bank, credit union, or mortgage company's needs. We're ready when you are.

In the meantime, enjoy this free guide to HMDA compliance:


Related: What Is A Compliance Management System And Why Your FI Needs One


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