Mortgage Market Conditions and Borrower Outcomes: Evidence from the 2012 HMDA Data and Matched HMDA–Credit Record Data

Federal Reserve Board of Governors

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Date Published November 2013
Primary Author Neil Bhutta
Other Authors Glenn B. Canner
Theme Consumer Protection / Mandatory Disclosure, Housing Market Analysis
Country United States


One purpose of this article, similar to that of previous articles, is to describe mortgage market activity in 2012 and in prior years using the HMDA data.8 Notably, for their 2012 lending, covered institutions were directed to use the census-tract definitions created for the 2010 decennial census to identify property location, whereas in the previous 10 years, census-tract definitions based on the 2000 census were used. Moreover, in preparing public disclosures for the 2012 HMDA data, the FFIEC used census-tract population and housing characteristics derived from the 2010 decennial census and the 2006–10 American Community Survey (ACS).9 Because many census tracts have changed boundaries and have had substantial changes in their population and housing characteristics over the past decade, some caution needs to be exercised when comparing lending patterns across census tracts between 2012 and earlier years. In addition to our review of the 2012 HMDA data, we present the results of a first look at a new data set composed of HMDA records matched to borrowers’ credit records. The matched data provide an opportunity to explore many aspects of home lending that the HMDA data alone cannot address. In particular, we are able to compare the credit characteristics (for example, credit scores) at loan origination, and subsequent payment performance, by various HMDA attributes such as income, minority status, and type of lender. Also, because the credit record data are longitudinal and follow individuals rather than just their mortgages, we are able to study long-term outcomes of mortgage borrowers beyond performance on their mortgage, such as whether credit scores recover after delinquency at a different pace for different demographic groups. We focus on loans made in 2006, which reflect lending activity at the height of the recent housing boom, and loans made in 2010, which reflect the far more subdued market conditions that were still largely present in 2012. We examine credit profiles at origination and subsequent performance for both vintages, and they reveal how dramatically the lending environment has changed.

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