The Federal Financial Institutions Examination Council (FFIEC) [1] has announced the availability of data on 2020 mortgage lending transactions at 4,475 U.S. financial institutions (banks, savings associations, credit unions, and mortgage companies) reported under the Home Mortgage Disclosure Act (HMDA) [2].
For 2020, the number of reporting institutions declined by about 18.8% from the previous year to 4,475. One reason for the change is that, in 2020, the Bureau issued a final rule amending Regulation C [3] to increase the threshold for collecting and reporting data about closed-end mortgage loans from 25 to 100 loans, effective July 1, 2020.
The 2020 data include information on 22.7 million home loan applications. Among them, 20.4 million were closed-end, 1.7 million were open-end, and, for another 563,000 records, pursuant to the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) [4]’s partial exemptions, financial institutions did not indicate whether the records were closed-end or open-end.
Home Purchase Loans
From 2019 to 2020, the share of home purchase loans for first lien, one- to four-family, site-built, owner-occupied properties made to low- or moderate-income borrowers (those with income of less than 80% of area median income) increased slightly from 28.6% to 30.4%, and the share of refinance loans to low- and moderate-income borrowers for first lien, one- to four-family, site-built, owner-occupied properties decreased from 23.8% to 19.3%.
In terms of borrower race and ethnicity, the share of home purchase loans for first lien, one- to four-family, site-built, owner-occupied properties made to Black borrowers rose from 7.0% in 2019, to 7.3% in 2020, the share made to Hispanic-White borrowers decreased slightly from 9.2% to 9.1%, and those made to Asian borrowers decreased from 5.7% to 5.5%.
The Refi Share
From 2019 to 2020, the share of refinance loans for first lien, one- to four-family, site-built, owner-occupied properties made to Black borrowers decreased from 5.3% to 4.3%, the share made to Hispanic-White borrowers decreased from 6.2% to 5.3%, and the share made to Asian borrowers increased from 5.4% to 6.7%.
In 2020, Black and Hispanic-White applicants experienced denial rates for first lien, one- to four-family, site-built, owner-occupied conventional home purchase loans of 17.2% and 11.2%, respectively, while the denial rates for Asian and non-Hispanic-White applicants were 9.1% and 6.1%, respectively.
Governmental Loans
The Federal Housing Administration (FHA)-insured share of first-lien home purchase loans for one- to four-family, site-built, owner-occupied properties decreased slightly from 20.2% in 2019 to 19.5% in 2020. The Department of Veterans Affairs (VA)-guaranteed share of such loans decreased slightly to 10.4% in 2020. The overall government-backed share of such home purchase loans, including FHA, VA, Rural Housing Service, and Farm Service Agency loans, was 32.9% in 2020, down from 33.4% in 2019.
The FHA-insured share of refinance mortgages for first lien, 1-4 family, site-built, owner-occupied properties decreased to 6.6% in 2020 from 12.0% in 2019, while the VA-guaranteed share of such refinance loans decreased from 13.5% in 2019 to 11.9% in 2020.
Non-Depository Companies
The share of mortgages originated by non-depository, independent mortgage firms has increased in recent years. In 2020, this group of lenders accounted for 60.7% of first lien, one- to four-family, site-built, owner-occupied home-purchase loans, up from 56.4% in 2019. Independent mortgage companies also originated 63.3% of first lien, one- to four-family, site-built, owner-occupied refinance loans, an increase from 58.1% in 2019.
HOEPA Coverage
The HMDA data also identify loans that are covered by the Home Ownership and Equity Protection Act (HOEPA). Under HOEPA, certain types of mortgage loans that have interest rates or total points and fees above specified levels are subject to certain requirements, such as additional disclosures to consumers, and also are subject to various restrictions on loan terms. For 2020, 6,682 loan originations covered by HOEPA were reported: 2,915 home purchase loans for one- to four-family properties; 369 home improvement loans for one- to four-family properties; and 3,398 refinance loans for one- to four-family properties.