Housing Finance Policy Center
Lunchtime Data Talk
New HMDA Data: What Can We Learn?
Bing Bai, Urban Institute
Neil Bhutta, Federal Reserved Board of Governors
Molly Boesel, CoreLogic
Laurie Goodman, Urban Institute
October 6, 2015
The 2014 HMDA Data
N E I L BHU T TA ( F R B)
JAC K P O P P ER ( HA RVA RD)
DA N I E L R I N G O ( F R B)
J I M M Y K E L L I HER ( F R B)
A couple disclaimers:
1) Most of these results are drawn from our Federal Reserve Bulletin article (link), but
some results reflect ongoing work and are preliminary
2) The views expressed here do not necessarily reflect those of the Federal Reserve
Oct 6, 2015
2014 HMDA DATA
3
Refinance lending declined over 50
percent in 2014
Refinance loans
Millions
15.0
12.0
9.0
6.0
3.0
1994
Oct 6, 2015
1998
2002
2006
2014 HMDA DATA
2010
0.0
2014
4
Refinances declined when interest rates
jumped in 2013
Thousands of loans
Percentage points
4.6
800
4.4
700
4.2
600
4
500
3.8
400
3.6
300
3.4
200
3.2
100
0
3
Prime rate (left scale)
Oct 6, 2015
Refinance originations (right scale)
2014 HMDA DATA
5
Purchase originations grew in 2014, but
remain at a subdued level
Home purchase originations
Millions
6.0
5.0
4.0
3.0
2.0
1994
Oct 6, 2015
1998
2002
2006
2014 HMDA DATA
2010
1.0
2014
6
Growth in purchase originations
resumed in 2014
Monthly purchase originations
Thousands of
loans
350
300
250
200
150
100
Unadjusted
Oct 6, 2015
Seasonally adjusted
2014 HMDA DATA
7
Ability-to-repay (ATR) and Qualified Mortgage
(QM) rules went into effect in 2014
 ATR: Lenders must determine that borrowers have the ability to repay
(verify income/assets, consider credit history, etc.)
 QM loans are presumed to comply with ATR
 No risky features (e.g. interest-only, negative amortization)
 Points/fees < 3% (higher for loans < $100k)
 DTI < 43% (not applicable to GSE, FHA/VA, or small creditor portfolio loans)
Oct 6, 2015
2014 HMDA DATA
8
Minority shares of purchase loans
reversed downward trends in 2014
Minority shares of home-purchase loans
14.0
12.0
10.0
8.0
6.0
4.0
2004
2005
2006
2007
2008
2009
Black or African American
Oct 6, 2015
2014 HMDA DATA
2010
2011
2012
2013
2014
Hispanic white
9
Minorities’ use of FHA continued to
decline in 2014
FHA/VA/RHS Share of Home Purchase Loans
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
2004
2005
2006
2007
Black or African American
Oct 6, 2015
2008
2009
2010
Hispanic white
2014 HMDA DATA
2011
2012
2013
2014
Non-Hispanic white
10
Did high-DTI lending decline?
Front-end debt payment to income (DTI) ratio: estimate using loan amount, income, APR
spread and date of origination
90th percentile of front-end DTI, by race
2013
30
30
Asian
Oct 6, 2015
27
28
Black
2014
30
31
25
Hispanic
2014 HMDA DATA
26
White
11
High DTI lending above the conforming
loan limit
High-DTI share of originations, 2014
.16
.14
.12
.06
.04
.04
.06
.08
.08
.1
.1
.12
.14
.16
High-DTI share of originations, 2013
-100
-50
0
50
Loan size relative to conf loan limit ($,000's)
100
-100
-50
0
50
Loan size relative to conf loan limit ($,000's)
100
Notes: Each data point represents the share of first-lien conventional home purchase loans originated by banks with assets > $2
billion with an estimated front-end DTI > 28%.
Oct 6, 2015
2014 HMDA DATA
12
Did “small creditors” originate more
high-DTI loans?
Small creditor: assets < $2 billion & originations < 500 last year
-.03
0
.03
.06
.09
Conventional high-DTI share of originations
0
Oct 6, 2015
200
400
600
Originations last year
2014 HMDA DATA
800
1000
13
Higher-priced QMs
QM loans that are higher priced (i.e. APR >= 150 bps over prime) have a
“rebuttable presumption” of compliance, as opposed to a safe harbor
Exception: small creditors get the safe harbor up to 350 bps over prime
Oct 6, 2015
2014 HMDA DATA
14
Do small creditors originate more higherpriced loans?
-.05
0
.05
.1
.15
.2
Conventional higher-priced share of originations
0
Oct 6, 2015
200
600
400
Originations last year
2014 HMDA DATA
800
1000
15
Smallest institutions may value the safe
harbor
0
500
1000
1500
2000
2500
Number of conventional loans by small creditors
2
3
4
5
Spread over APOR
Oct 6, 2015
2014 HMDA DATA
16
Changes also made to HOEPA in 2014
 Home Ownership and Equity Protection Act (HOEPA): special consumer
protections apply to extremely high-priced mortgages
 Changes in 2014:
 Added new protections
 Expanded coverage to home purchase loans and HELOCs
 Modified price thresholds that trigger HOEPA
Oct 6, 2015
2014 HMDA DATA
17
Sharp drop in loans at HOEPA APR
threshold in 2014
Site built or manufactured with loan amount ≥ $50,000
Number of loans
1,200
1,000
2013
2014
800
600
400
200
0
6.05
6.15
6.25
6.35
6.45
6.55
6.65
6.75
6.85
6.95
APR spread over APOR
Oct 6, 2015
2014 HMDA DATA
18
CoreLogic Estimate of Mortgage Originations
Urban Institute Lunchtime Data Talk
Molly Boesel
October 6, 2015
©2015 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.
CoreLogic Originations Benchmark Well with HMDA
First-Lien Mortgage Originations
Source: HMDA, CoreLogic Public Records Data
20
©2015 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.
Monthly Originations Available Through 1H 2015
Number of Purchase Mortgages up 12 Percent over 1H 2014
Source: CoreLogic Public Records Data
21
©2015 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.
Monthly Originations Available Through 1H 2015
Dollar Amount Purchase Mortgages up 17 Percent over 1H 2014
2015 on pace for $812 billion of
purchase originations
Source: CoreLogic Public Records Data
22
©2015 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.
Monthly Originations Property Type
Condo Share of Originations Remains Suppressed
Source: CoreLogic Public Records Data
23
©2015 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.
Monthly Originations Sales Type
New Construction and Distressed About 20 Percent of Total
1H 2014 to 1H 2015 Orig.
Re-sales:
+ 16%
New Constr: + 2%
Distressed: - 11%
Source: CoreLogic Public Records Data
24
©2015 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.
Plans for the Originations Data
 Regular updates on our Blog http://www.corelogic.com/blog/default.aspx
 Special cuts by
 Product,
 sales type,
 government share,
 ARM Share
 Commercial and multifamily
 Special geographies
 What else do you want to see?
25
©2015 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.
Where to find more information
Look for regular updates to our commentary and data at
http://www.corelogic.com/about-us/research.aspx
Twitter: @CoreLogicEcon
The views, opinions, forecasts and estimates herein are those of the CoreLogic Office of the Chief Economist, are subject to change
without notice and do not necessarily reflect the position of CoreLogic or its management. The Office of the Chief Economist makes every
effort to provide accurate and reliable information, however, it does not guarantee accuracy, completeness, timeliness or suitability for any
particular purpose.
CORELOGIC and the CoreLogic logo are trademarks of CoreLogic, Inc. and/or its subsidiaries.
26
©2015 CoreLogic, Inc. All rights reserved. Proprietary and Confidential.
Table 11. Lending activity, by type of institution, 2014
Percent except as noted
Type of institution1
Institutions and type of activity
Number of institutions
Small
bank
(< $1B)
Large
bank
Credit
union
Affiliated
mortgage
company
Independent
mortgage
company
All
3,367
751
1,984
139
821
7,062
558
2,161
545
313
2,403
5,980
9.3
36.1
9.1
5.2
40.2
100
220
869
172
189
1,288
2,737
Conventional
73.8
74.3
86.8
58.9
51.9
63.4
Higher-priced share of conventional loans
11.3
1.7
8.9
1.0
1.5
3.1
LMI neighborhood3
11.9
11.8
12.7
12.6
14.7
13.3
Minority borrower4
11.8
17.8
14.4
16.8
22.6
19.3
Sold5
70.6
72.7
43.7
97.3
97.6
84.1
Originations (thousands)
Market share
Home-purchase loans (thousands)*
* First lien, owner-occupied, site-buillt loans
Oct 6, 2015
2014 HMDA DATA
27
Independent mortgage companies have
historically high market share
Percent
Shares of home purchase loans
100
Independent mortgage companies
80
60
Affiliate mortgage companies
40
Large banks
20
Small banks
Credit unions
1996
Oct 6, 2015
1998
2000
2002
2004
2006
2014 HMDA DATA
2008
2010
2012
0
2014
28
Mortgage company expansion spans
market segments
Independent mortgage company share of purchase loans
Percent
70
60
50
40
30
20
10
0
1996
1998
2000
2002
Conforming
Oct 6, 2015
2004
2006
Jumbo
2014 HMDA DATA
2008
2010
2012
2014
Nonconventional
29
Mortgage company expansion spans
market segments (cont.)
Independent mortgage company share of purchase loans
Percent
70
60
50
40
30
20
10
0
1996
1998
Asian
Oct 6, 2015
2000
2002
Black
2004
2006
Hispanic white
2014 HMDA DATA
2008
2010
2012
2014
Non-Hispanic white
30
Western states rely most heavily on
independent mortgage companies
Oct 6, 2015
2014 HMDA DATA
31
Potential issues raised by the shifting
landscape
 Housing finance system is more reliant on less regulated and less financially
robust institutions
 Credit unions and mortgage companies originate majority of loans, but they
are not covered by the Community Reinvestment Act (CRA)
 CRA-related loans to LMI borrowers substantially outperformed non-CRA loans (e.g.
Avery and Brevoort 2015, Bhutta and Canner 2013)
 Do independent mortgage companies charge more?...
Oct 6, 2015
2014 HMDA DATA
32
Do independent mortgage companies (IMCs)
charge more for FHA loans?
FHA loan pricing, IMCs relative to other institutions, 2014
Banks
Affiliates
Credit unions
Borrower controls
County fixed effects
Adj R-square
N
Outcome: Prob(higher-priced)
Outcome: APR Spread for higher-priced loans
IMC higher-price share = 0.51
IMC mean spread = 1.85
-0.253**
(0.016)
-0.118**
(0.022)
-0.370**
(0.033)
0.051
583,539
-0.231**
(0.012)
-0.089**
(0.018)
-0.375**
(0.040)
Yes
Yes
0.14
580,063
-0.079**
(0.008)
-0.067**
(0.008)
-0.030
(0.031)
0.01
258,646
-0.087**
(0.005)
-0.062**
(0.007)
-0.056
(0.033)
Yes
Yes
0.097
257,475
Notes: First-lien, owner-occupied FHA purchase mortgages only. Borrower controls includes sets of dummy variables for race, ethnicity,
income, loan amount and origination month. Higher-priced loans have an APR at least 150 bps over prime. Standard errors in parentheses,
clustered at state level.
Oct 6, 2015
2014 HMDA DATA
33
An interactive map based on HMDA data
Bing Bai, Research Associate
Housing Finance Policy Center
Urban Institute
Urban Institute Lunchtime Data Talk
October 6, 2015
Washington, DC
A New Way to View HMDA Data
An interactive map that visualizes14 years of HMDA data on more than 120 million
mortgages by race and ethnicity throughout the country
35
Data
• 2001 – 2014 HMDA originations
• Owner-occupied only
• Both purchase and refinance loans
• Each dot on the map represents 20 new mortgages
• The color of the dot indicates the reported race and ethnicity of the borrowers
36
HMDA Map 2014
37
DC : 2014
38
DC : 2006 vs. 2014
Minority Mortgage Shares
29.3%
19.1%
7.7%
2006
2014
17.8%
African American
11.8%
Hispanic
8.9%
Asian
39
San Francisco & San Jose : 2006 vs. 2014
Minority Mortgage Shares
34.9%
25.7%
24.3%
African American
Hispanic
6.5%
2006
9.6%
2.9%
2014
Asian
40
Detroit : 2006 vs. 2014
17.2%
Minority Mortgage Shares
African American
6.4%
4.4%
2.8%
2.4%
2006
Hispanic
Asian
2.0%
2014
41
US Minority Mortgage Shares
14%
12%
10%
8%
6%
4%
2%
0%
2001
2002
2003
2004
2005
2006
2007
African American
2008
2009
Hispanic
Asian
2010
2011
2012
2013
42
2014
For More Information
HMDA Map: http://datatools.urban.org/Features/mortgages-by-race/#5/37.996/-96.570
43