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The government wants to know more about your mortgage





The federal government already collects certain information from mortgage lenders nationwide. Under the Home Mortgage Disclosure Act (HMDA), which became law in 1975, mortgage lenders report loan type and term, property location, and the race, ethnicity and sex of the borrower.

The Consumer Financial Protection Bureau (CFPB) has taken over rulemaking authority for the HMDA and wants to collect even more information from mortgage transactions as well as improve upon the way the information is both collected and shared. The CFPB has already made its formal request to do so, which means that an industry panel will begin debating the bureau's request and finalizing what information they should collect.

"We want there to be better information, better collection, and better access to this important information," said Richard Cordray, director of the CFPB, in a prepared statement. With this data, the bureau can help better identify and stop predatory practices, Cordray said.

"Better public HMDA data would help us improve upon an important resource that already allows regulators, government agencies, housing groups and consumer rights groups to study and monitor the single most important consumer financial product in the United States: the mortgage loan," Cordray said.

New information to report

Here's the new information the CFPB wants to collect:

  • Interest rates, including teaser rates
  • Origination fees
  • Discount points
  • Reasons behind loan rejections
  • Debt-to-income ratios
  • Borrower age
  • Credit score
  • QM or non-QM

Gary Painter, director of research at the USC Lusk Center for Real Estate in Los Angeles, says that there is always a benefit to collecting more information about important financial transactions. And few transactions are as important to the U.S. economy as are mortgage loans.

Already, Painter says, the information collected under the HMDA has provided important data to regulators on lending patterns in particular parts of the country.

Is the extra data worth the added cost?

That's a question that can only be answered after a more detailed study of the proposal, Painter says.

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