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Just Thoughts is the blog of the Empire Justice Center, New York’s statewide, multi-issue, multi-strategy public interest law firm focused on changing the “systems” within which poor and low income families live. Here staff and guest authors will share stories, announcements and perspectives on timely issues related to our work.



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Still working on that sunlight


In my last post, I talked about the need for better data to increase transparency and accountability in the mortgage lending market.  This week I have a great opportunity to make my case.  I am one of several consumer advocates from across the country who will be talking with staff at the Consumer Financial Protection Bureau (CFPB) about what information would be most useful to the public, regulators and policy makers, and how this information can be efficiently collected from mortgage lenders and servicers.

We will be talking with the CFPB about data-related issues, all of which are part of Dodd-Frank [1] and are critical to shedding more light on mortgage lending and servicing in this country:

(1) data enhancements to the Home Mortgage Disclosure Act (HMDA) dataset,
(2) the establishment of a default and foreclosure database and
(3) the public availability of the Home Affordable Modification Program (HAMP) loan modification data.

Maybe I’m just really curious, but when homeowners default on their mortgage loans, I want to understand what led these homeowners to default while other homeowners continue to pay and stay current on their loans.  Specifically, were borrowers with certain loan terms more likely to default than other borrowers?  And were the borrowers who defaulted able to get affordable loan modifications?  Using data from these databases, we should be able to point to the answers.

However, these datasets are three separate entities, collected at different points in time and often from two or more different reporting entities.  So we need a way to easily connect the data from one database to the other. This is why during our meeting with the CFPB this week I am going to be the champion of the “universal loan identifier,” or universal loan ID.  Are you still with me?  I hope so, because this is important.

The universal loan ID would first be used by the lender when it reports the loan under HMDA.  The ID would then follow the loan to the servicer and, if needed, be used when reporting any defaults, foreclosures or modifications related to that loan.  This relieves the servicer from collecting and reporting a variety of borrower and loan-related data pieces, including borrower income, race/ethnicity, gender, age and credit score, loan amount, term, APR and mortgage channel.  Regulators, policy makers and the public would already have access to this information in the HMDA data via the universal loan ID.

I believe the universal loan ID is the key to increased transparency and accountability, without sacrificing efficiency.

End Note:
 [1] See Sections 1094, 1447 and 1483 of the Dodd-Frank Wall Street Reform and Consumer Protection Act for the language pertaining to these datasets.



Tags: HMDA | Consumer Financial Protection Bureau | CFPB | mortgage lending | defaults | foreclosures | loan modifications




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