Chapter 1
Federal Mortgage Laws and Consumer Protection Regulations
Course: Safe Mlo Prep
Subject: Safe Mlo Prep
Chapter: Federal Mortgage Laws And Consumer Protection Regulations
OVERVIEW
The Home Mortgage Disclosure Act was enacted in 1975 to create a public data reporting system that allows regulators, community groups, and consumers to see where lenders are making — and not making — mortgage loans. It is implemented through Regulation C and enforced by the CFPB.
- Why HMDA Was Created
Before HMDA, lenders could quietly avoid — or redline — minority and low-income neighborhoods without public accountability. HMDA created a mandatory reporting system so that lending patterns could be publicly scrutinized and discriminatory practices identified.
- What Data Is Collected
HMDA requires covered lenders to collect the following for every application:
- Applicant demographics: Race, ethnicity, and sex — collected solely for reporting purposes — kept completely separate from the credit decision
- Loan characteristics: Loan type, purpose, property type, location, and loan amount
- Action taken: Originated, approved but not accepted, denied, withdrawn, or incomplete
- Pricing data: Rate spread between APR and APOR, total points and fees, prepayment penalty information