HMDAVision is All You Need: Avoiding the 3 Top Reasons for Bad HMDA Takes
HMDA, or Home Mortgage Disclosure Act, data is used to make many claims about the mortgage industry. It is, after all, in the words of the @CFPB “the most comprehensive publicly available information on mortgage market activity”. At the same time, it is not uncommon to find divergent statements coming from this singular data set – why is this?
1. The Data is not Static
Earlier this month, the CFPB posted its Summary of 2023 Data on Mortgage Lending. The timing of this post coincides with the 2nd of two major HMDA data events each year: each March, the CFPB is required to publish the HMDA data it has collected for the preceding year; each summer, it augments the March data with 1) engineered fields which depend only on the initial fields, and 2) fields calculated from non-public HMDA variables only available to the CFPB. But the fact that the data is released in two stages is not the by itself the reason for conflicting takes. Rather, it is the fact that HMDA data is continuously updated – every week, in fact, from the summer forward.
This means that right now our SaaS tool HMDAVision is up to date with data published July 28. This gives us a better vantage point for understanding the market than we had in March – better in fact than what the CFPB had when they did the analysis linked above (which they based on a May 1 data snapshot). This means that when your vendor tells you there are 5,094 lenders reporting in 2023, you need to ask, “as of when”? That was the number in the first data cut from March; by May 1 it was 5,113, and now it is 5,116 – the increase coming from late filers.
Similarly, the overall loan count and other stats like rankings change over time as well. For example, earlier this year, we noted that Florida was #1 in originations for 2023. Several weeks later, as late filings and corrections came in, Florida has dropped to #2, only to bounce back to #1 due to yet more corrections:
Similarly, the top 10 lender ranking we shared with National Mortgage News back in March has held steady, but not so for every spot in the top 50. An independent lender who initially reported 6,340 originations, ranking it at #140, corrected their loan count to 19,058 which vaulted them to #41. As of today, the CFPB is still updating data from 2021, 2022, and 2023, and we’re scooping it all up.
#2 The data is nuanced
When the CFPB expanded the data points it collects and reports in 2018, we entered a new era of HMDA analysis. Suddenly we had new, powerful ways to measure, compete, grow, and include, depending on where you sit in the industry. One example is that it is now possible to identify the loan channel, but you have to combine two of the new fields to do so. We “open-sourced" our definition of channel here to drive better understanding and consistency among all stakeholders. If you come across 2 vendors with contradictory claims about lender rankings by channel, it means at least one of them hasn’t updated their definitions yet.
#3 The data is large
Since 2018, the CFPB has published details of 112,331,286 mortgage transactions. In HMDAVision, we put them all at our users’ fingertips for fast, interactive exploration where they can slice by all filters in any combination in real time – our superpower. Do you remember the scene in the first Iron Man movie where the hero asks the bad guy wearing an inferior suit how he had handled the icing problem? Many vendors don’t have a solution that can do what ours can, so their capabilities degrade when they get to certain levels of scale and complexity.
We’d love to hear about your challenges and successes with HMDA and whether you are currently achieving all your competitive intel and fair lending goals.
