This article presents key findings from the 2007 HMDA data. In doing so, it highlights the notable changes in relationships that are revealed when the 2007 data are compared with data from earlier years. Because of the importance of the loan-pricing information included in the HMDA data and because of the recent turmoil in the residential mortgage market, particularly the higher-priced segment of the market, much of the focus here is on the data pertaining to that market segment…
For 2007, lenders covered by HMDA reported information on 21.4 million applications for home loans. Almost all of the applications were for loans to be secured by one- to four-family (referred to here as “single family”) houses (table 1). These applications resulted in more than 10.4 million loan extensions (data not shown in table). Lenders also reported information on 4.8 million loans that they had purchased from other institutions and on 433,000 requests for preapprovals of home-purchase loans that had not resulted in a loan origination (data not shown in table); the pre-approval requests were turned down by the lender or were granted but not acted on by the applicant.
The total number of reported applications fell about 6.0 million, and the number ofreported loans fell 3.5 million–or 22 percent and 25 percent, respectively–from 2006 (2006 data not shown in tables). Lending for both home purchase and refinancing fell as slower house price appreciation and, in some areas, outright declines in property values diminished the attractiveness of buying and selling properties or limited opportunities to refinance outstanding loans. The imposition of tighter underwriting standards, an increase in mortgage interest rates, and the elimination of some loan products used to stretch affordability also contributed to the reduction in lending. Finally, a portion of the decline in lending activity was due to the nonreporting of loans made by institutions that reported data for 2006 but discontinued operations during 2007.
The 2007 HMDA Data
September 11, 2008