ComplianceTech Announces that the 2010 HMDA Data Released Today Show Less Competition

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The 2010 HMDA data contains mortgage lending transactions at 7,923 U.S. financial institutions covered by the Home Mortgage Disclosure Act (HMDA). “The FFIEC stated that the number of reporting institutions fell 2 percent from 2009, attributable to a relatively large decline (about 7 percent from 2009) in the number of mortgage companies reporting data.” But in the opinion of Dr. Debby Lindsey-Taliefero, Associate Professor, Howard University, “the figures reveal a dramatic and troubling trend toward industry consolidation and less competition in comparison to the number of reporters for prior years.” Lindsey-Taliefero maintains that “the reduction of lenders competing in the marketplace has fallen by nearly a thousand since 2006. Less competition rarely, if ever, benefits the consumer.”

The figures reveal a dramatic and troubling trend toward industry consolidation and less competition in comparison to the number of reporters for prior years.

Today the Federal Financial Institutions Examination Council (FFIEC) released the 2010 loan application registers (LARs) for all reporting mortgage lenders in compliance with the Home Mortgage Disclosure Act (HMDA). The data includes all reported transactions from banks, savings associations, credit unions, and mortgage companies. The HMDA data cover 2010 lending activity—applications, originations, purchases of loans, denials, and other actions such as incomplete or withdrawn applications.

The 2010 HMDA data contains mortgage lending transactions at 7,923 U.S. financial institutions covered by the Home Mortgage Disclosure Act (HMDA). “The FFIEC stated that the number of reporting institutions fell 2 percent from 2009, attributable to a relatively large decline (about 7 percent from 2009) in the number of mortgage companies reporting data.” But in the opinion of Dr. Debby Lindsey-Taliefero, Associate Professor, Howard University, “the figures reveal a dramatic and troubling trend toward industry consolidation and less competition in comparison to the number of reporters for prior years.” Lindsey-Taliefero maintains that “the reduction of lenders competing in the marketplace has fallen by nearly a thousand since 2006. Less competition rarely, if ever, benefits the consumer.”

Year     # of Lenders
2010     -    7,923
2009     -    8,124
2008 -    8,388
2007 -    8,610
2006     -    8,886

Source: LendingPatterns™ by ComplianceTech

According to the FFIEC’s press release, “the 2010 data include information on 12.9 million home loan applications (of which nearly 8 million resulted in loan originations) and 3.2 million loan purchases, for a total of about 16.2 million actions.” According to Maurice Jourdain-Earl, Managing Director of ComplianceTech, “the paucity of mortgage applications is an extreme reflection of the pervasive weakness in the economy and the unreasonable tightness in the mortgage market even while interest rates are at historically low levels and housing affordability trends positive. We have not witnessed this low level of mortgage lending activity in a very long time.”

All applications and purchases 2004-2009

Year----------$ Volume         -------        Applications
2010----------n/a    ------------         --- 16,200,000+*
2009---$3,902,210,068,000     --- 19,493,491
2008---$3,446,236,491,000     --- 17,391,570
2007---$5,279,183,286,000        --- 26,605,695
2006 ---$6,295,214,383,000     --- 34,105,441
2005 ---$6,486,583,582,000     --- 36,439,157
2004 ---$5,460,902,691,000     --- 33,607,736
Source: LendingPatterns™ by ComplianceTech, *FFIEC estimate

ComplianceTech maintains, in an online application called LendingPatterns™, the industry’s largest privately maintained historical HMDA database. Each year when the HMDA data are made public, ComplianceTech applies expert processing routines to the raw data and uploads this latest information into LendingPatterns™ to be made available to its subscribers within 30 days.

LendingPatterns™ will allow non-technical users to run reports on the 12.9 million home loan applications reported for 2010 and all prior years since 2004. This web-based tool enables users to quickly and easily produce detailed reports/maps/charts analyzing home mortgage activity by lender, borrower racial/ethnic/gender characteristics, area demographics, geography, and loan characteristics.

ComplianceTech provides fair lending (ECOA & FH Act) and Community Reinvestment Act (CRA) analytical products to large and small financial institutions, enforcement agencies and community based organizations. ComplianceTech offers innovative software solutions and compliance consulting services to financial institutions and regulatory agencies. Their software products include LendingPatterns™, Shamus®: The Fair Lending Risk Manager, the Racestimator™, Fair Lending Magic™, and LMI and Minority Zip Code Opportunity Maps™.

For more information please visit our website: http://www.ComplianceTech.com

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Dana Ginsburg
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