News and Resources

Special Alert: FFIEC Releases 2008 HMDA Data

September 30, 2009

The Federal Financial Institutions Examination Council (FFIEC) today released the data on mortgage applications, denials, originations, and purchases for 2008. The release contains no surprises. As anticipated, the data as described in the FFIEC’s press release reflect a sharp decline in lending activity and an even greater decline in subprime lending. Reported originated loans of all types decreased by 31%, and higher-priced (generally subprime) loans as a proportion of the total originated have decreased dramatically from their high of 29% in 2006, to 18% in 2007 and 12% in 2008. The FFIEC notes that the average rate spread on higher-priced loans has also decreased, implying that fewer loans are being made to the most credit-impaired borrowers.

It is not surprising that the dramatic reduction in loans to consumers with credit problems was accompanied by continued disparities in the number of higher-priced loans made to minorities as compared to non-Hispanic whites, as well as a higher minority denial rate. As the press release notes, the HMDA numbers released to the public are not adjusted for creditworthiness factors, and the data continues to show that minorities are over-represented in lower credit score bands. 

Banks have already begun to receive letters from federal banking regulators that they will be targeted for special fair lending scrutiny based on the data that was made public today. Regulators have indicated that they will send fewer letters this year than previously, but, in light of the political environment, we expect that more of these inquiries will lead to referrals to the Department of Justice.

The FFIEC press release is available at  

Questions regarding the matters discussed in this Alert may be directed to any of our lawyers listed below, or to any other BuckleySandler lawyer with whom you have consulted in the past on similar matters.

Andrew L. Sandler, (202) 349-8001,

Ben Klubes,  (202) 349-8002,

Jeffrey Naimon, (202) 349-8030,

Jonice Gray Tucker (202) 349-8005,