In a Federal Register notice, the CFPB announced its approval of the new Fannie Mae/Freddie Mac Uniform Residential Loan Application (URLA) and stated that those covered under the Home Mortgage Disclosure Act (HMDA) can begin collecting data on ethnicity and race, starting Jan. 1, 2017.
Fannie Mae and Freddie Mac had issued a revised and redesigned the URLA on Aug. 23 as part of an effort to update the Uniform Loan Application Dataset. This was the first substantial revision to the form in more than two decades.
“This bureau official approval is being issued separately from, and without amending, the official interpretations to Regulation B contained in Supplement I to Regulation B. The bureau will consider whether to address the treatment of outdated versions of the URLA in appendix B and Supplement I to Regulation B at a later date,” the CFPB stated within the Federal Register notice.
The government-sponsored enterprises had sought the CFPB’s approval because the URLA requests information about applicants’ race, color, religion, national origin and sex, as well as other information closely regulated by ECOA and Regulation B. The new URLA has been redesigned in part to reflect HMDA’s expanded data collection requirements.
The CFPB also announced that, at any time from Jan. 1, 2017, through Dec. 31, 2017, creditors may (at their option) permit loan applicants to self-identify using disaggregated ethnic and racial categories (as instructed in Appendix B to Regulation C).
The announcements were published the same day the Federal Financial Institutions Examination Council (FFIEC) released 2015 HMDA data on mortgage lending transactions at 6,913 financial institutions, a decline of about 2.5 percent from the previous year.
Although there were some new reporters in 2015, this number was more than offset by the number of institutions that reported in 2014 but did not do so in 2015. In most cases, this was because of mergers and acquisitions, according to the CFPB.
The data encompasses 12.1 million mortgage applications, 7.4 million of which resulted in loan originations — a 22 percent increase from 2014. The total number of originated loans increased by 1.4 million between 2014 and 2015. Refinance originations increased by 36 percent, and home purchase lending increased by 13 percent.
Loans backed by the Federal Housing Administration (FHA), Veterans Administration or federal farm programs accounted for 39 percent of all new mortgages in 2015, up two points from 2014. The FHA’s market share rose four points, largely because of reductions in its mortgage insurance premiums, the FFIEC stated. The FHA’s share of refinances rose by five points in 2015.
According to the HMDA data, the share of home purchase loans for 1–4 family properties made to African-American borrowers rose from 4.9 percent to nearly 5.2 percent, the share made to Hispanic-white borrowers rose from 7.5 percent to 7.9 percent, and those made to Asian borrowers declined slightly from 5.7 percent to 5.5 percent.
The share of refinance loans made to African-American borrowers decreased from 5.2 percent to 4.9 percent, the share made to Hispanic-white borrowers rose slightly from 6.0 percent to 6.1 percent and those made to Asian borrowers rose from 4.5 percent to 5.1 percent.
The share of home purchase loans going to low- and moderate-income (LMI) borrowers rose one point to 27 percent, and the share of refinances by LMI borrowers was at 22 percent, a decrease from 24 percent.