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More lenders are realizing that HMDA data can be a benefit in identifying new markets and paths to increase business in present markets. It will also help to identify competitors doing business in the same markets and the products and communities they serve.
With new data being collected, this information will become even more valuable. Lenders who pay attention to this data can identify new areas to lend, ways to improve current lending and increase their business in the future.
Minorities are trending to make up about half of all mortgage borrowers. The percent of borrowers within these groups may vary. But, their needs are basically the same; finding affordable financing for the homes they buy or refinance. The same needs for all borrowers.
The key is in identifying the minorities and markets, then developing the products to serve these needs. HMDA data can help, as long as it is reported completely and accurately.
This is critical in both the analysis of the reporting lender’s activity and in its use for determining future lending opportunities. Today, to do their HMDA reporting, too many lenders do a simple data dump from their LOS, with minimal analysis for completeness.
They may look for missing data, but do they analyze for inaccurate information? If they don’t, it may be a critical mistake. To avoid problems and potential fines, the HMDA information reported must not only be complete, it must be accurate.
It must report a true picture of the creditor’s lending patterns and the results of the applications taken. Otherwise, it may represent an inaccurate picture. A picture that may cause severe problems for the lender and render their HMDA data worthless. That ain’t no good for nobody…
Lenders need to have a system to extract their HMDA data and compare their LOS info against the contained within their loan documents. This will ensure it is accurate and complete.
This will allow you to review and quickly identify problems while determining areas that will benefit your business and any that may need some additional attention.
Such a review will also serve as a quality check to determine common mistakes and defects in people and processes that can be addressed and corrected. This should lead to a more efficient and profitable operation.
Complete and accurate HMDA data collection will ensure accurate HMDA reporting while providing lenders with valuable information about lending products and patterns that will help to identify future lending opportunities.
Accurate HMDA data will help you know your markets, identify new customers, eliminate defects, provide training, all to become a better, more profitable lender.
Are you ready to collect, report, and analyze complete and accurate HMDA data? Those who are will be the successful lenders of tomorrow. Those who are not will still be playing catch up…
