Federal agencies are building an unprecedented repository of home loan data to better track the industry and further develop consumer protections.
The “National Mortgage Database,” under construction by the Federal Housing Finance Agency and the Consumer Financial Protection Bureau (CFPB), will include information spanning the life of a mortgage loan from origination through servicing and include a variety of borrower characteristics.
- The borrower’s financial and credit profile.
- The mortgage product and terms.
- The property purchased or refinanced.
- The ongoing payment history of the loan.
While the $13.2 trillion mortgage market is the single largest market for consumer finance, comprehensive data is lacking on a complete, national scale.
Federal and state agencies, as well as private vendors track, and maintain varied aspects of mortgage information on a piecemeal basis, but the national database will be the first step at a broader strategy to help streamline data for research and policy analysis.
The CFPB, for example, monitors mortgage lenders and servicers for compliance with regulations and recently released its first “Supervisory Highlights: Fall 2012.”
The new national database is also designed to ensure the public, researchers and others, who want to keep tabs on the national mortgage market, have easy access to more accurate and comprehensive mortgage information.
With data dating back to 1998, the database will not contain personal information to protect individual consumers from being identified through the database or through any datasets that may be made available to researchers or the public.
Federal agencies will build the mother-of-all mortgage database by matching a nationwide sampling of credit bureau files on borrower’s mortgages and payment histories with informational files such as the HMDA database, property valuation models, and other data files to create a comprehensive picture for each mortgage.
The move fulfills an FHFA requirement under the Housing and Economic Recovery Act of 2008 (HERA) to conduct a monthly mortgage market survey.
How the National Mortgage Database will perform
The database should work to:
• Monitor the relative health of mortgage markets and consumers. The database will provide detailed mortgage loan performance information, including whether payments are made on time and information regarding loan modifications, foreclosures, and bankruptcies. This will help policy makers better understand how mortgage products are used and how they perform.
• Provide new insight on consumer decision-making. Agencies will be able to use the database to conduct surveys to better understand consumer decision-making and experiences across a range of topics such as mortgage shopping or distressed home ownership.
• Monitor new and emerging products in the mortgage market. The database will allow the agencies to monitor volume and performance of products in the mortgage market and help regulators identify potential problems or new risks.
• View both first and second lien mortgages for a given borrower. Policy makers increasingly need visibility into how many mortgages consumers may have and how they’re performing. The National Mortgage Database will be the first comprehensive database to permit such analysis.
• Understand the impact of consumers’ debt burden. The database will also include information about a borrower’s other debt obligations, such as auto loans or student loans. This will permit policymakers to better understand emerging borrowing trends and overall consumer debt burdens.
The agencies expect early versions of the National Mortgage Database to be complete in 2013.