Home Mortgage Disclosure Act - HMDA

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DEFINITION

A federal act approved in 1975 that requires mortgage lenders to keep records of certain key pieces of information regarding their lending practices. This information includes the number of pre-approvals made, the number of mortgages granted, loan amounts, etc. The primary purposes of the Home Mortgage Disclosure Act (HMDA) are to help authorities monitor discriminatory and predatory lending practices, as well as to ensure government resources are allocated properly.

INVESTOPEDIA EXPLAINS

Federal Regulation C requires lenders to prominently display a poster in every branch office lobby that provides information on requesting their unique HMDA statistics. These statistics can also be viewed by the public online for free at www.FFIEC.gov.

While these statistics are of natural interest to potential borrowers, they're also an important research tool for investors researching banking and lending stocks. By comparing the most recent few years' statistics, an investor can easily identify whether or not a lender is growing their core business.


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