The Home Mortgage Disclosure Act (HMDA) was enacted by Congress in 1975 with the goal of creating greater transparency and oversight in the residential mortgage market. It helps protect consumers from predatory lending practices, such as discriminatory loan terms, by requiring mortgage lenders to collect, disclose and report certain data about their loan originations. This data is then made available to the public via the Home Mortgage Disclosure Act (HMDA) database.

HMDA data can be extremely useful in identifying patterns and trends when analyzing the residential mortgage market. By having detailed information related to loan types, age and race of borrowers, and other data points, researchers, analysts, and regulators are able to assess how lenders are serving borrowers of different backgrounds and if they are complying with fair housing and other consumer protection laws.

At the highest level, HMDA data can be used to measure geographic disparities in access to credit. For example, if there is a neighborhood with fewer loans being underwritten, it could be because there are fewer lenders or that those lenders are maintaining higher lending standards.

HMDA data can also provide information related to the types of products lenders are offering and how borrowers are responding. This can be important for consumer advocacy organizations looking to ensure that consumers are not excluded from products that would benefit them.

By providing access to comprehensive mortgage lending data, HMDA has made the residential mortgage market more transparent and has successfully kept lenders accountable for their activity. As the market has grown and evolved, it is important for HMDA standards to remain up to date so that all borrowers can have the information they need to make smart financial decisions.