skip to navigation
skip to content

Financial Outsourcing Solutions

Compliance-Inside-Header.jpg

FOS Blog

03 Nov
2020

WHAT DOES 2019 HMDA DATA SHOW?

On June 24, 2020  the FFIEC announced the availability of 2019 HMDA Disclosures.  At the same time, they shared an analysis of the aggregate data submitted, comparing 2018 data with 2019 data.  This helps us to understand how financial institutions are meeting the credit needs of their communities.  Some key initial observations were

  • The number of reporting institutions declined by 3% (5,508 currently).
  • 2,494 reporters took advantage of EGRRCPA’s partial exemption (about 50%).
  • Data was reported on 15.1 million applications – 12.5 million closed-end and 2.1 million open-end.
  • Closed-end applications increased by 21% while open-end decreased by 9%.
  • Refinance originations increased by 78% while home purchases only increased 4%.
  • From 2018 to 2019, the share of home purchase loans for first lien, 1-4 family, site-built, owner-occupied properties made to LMI borrowers (those with income of less than 80 percent of area median income) increased slightly from 28.1 percent to 28.6 percent, and the share of refinance loans to low- and moderate-income borrowers for first lien, 1-4 family, site-built, owner-occupied properties decreased from 30 percent to 23.8 percent.
  • In the race and ethnicity analysis for home purchase loans for 1st lien, 1-4 family, site-built, owner-occupied properties
    • Black borrowers rose from 6.7% to 7.0%.
    • Hispanic White borrowers rose from 8.9% to 9.2%.
    • Asian borrowers decreased from 5.9% to 5.7%.
  • In the race and ethnicity analysis for refinances for 1st lien, 1-4 family, site-built, owner-occupied properties
    • Black borrowers fell from 6.2% to 5.3%.
    • Hispanic White borrowers fell from 8.9% to 9.2%.
    • Asian borrowers decreased from 5.9% to 5.7%.
  • In terms of independent mortgage company originations, home purchase loans were slightly down for purchases from 57.2% to 56.4%, but refinances were up from 56.1% to 58.1%.

2018 and 2019 were stable years with high employment and availability of housing stock, so, these numbers might be considered a baseline “good year.”  It will be interesting to see what 2020 brings due to COVID-19 circumstances – high unemployment and decreased number of homes available for sale as people “shelter in place.”  Some banks are reporting an increased number of mortgage loans due to refinancings while HELOCs have been flat.  With many folks cancelling vacations due to stay-at-home orders, they’re resorting to home improvements or building pools in their backyards.  And some just simply need a cash-out refinance to maintain the normalcy of their lives.

Since many institutions have adopted HMDA and CRA filing software, they may be able to analyze their bank’s data in ways that were not previously possible.  It would be advantageous to track your bank’s trends (like those above) for 2018 – 2020 to support your CRA program.  Are you continuing to offer the right products to meet the changing needs of your community?

For additional information contact the author at edehmey@fosaudit.com.