Two of the federal agencies tasked with overseeing various aspects of the mortgage lending industry recently decided that they would launch a new database so that consumers could get a fairer shake when it comes to this type of borrowing.
The Federal Housing Finance Agency and the Consumer Financial Protection Bureau recently decided to launch a National Mortgage Database, which will hold a wealth of information about borrowers across the country, and is designed to help them get better access to homes loans and refinancing when they want them, according to a report from the CFPB. Specifically, the NMD will hold all data about mortgages, beginning with the origination process, and should include a large amount of borrower data, such as their financial and credit background, the kind of mortgage they have and its associated terms.
However, the agencies largely believe that this will mostly be beneficial for government agencies which are attempting to regulate the industry, rather than help consumers on an individual basis, the report said. This is because regulators trying to better understand the way the mortgage market works as a whole, and trends seen nationwide may become clearer as a result of this data.
“In order to understand what is going on in the mortgage marketplace and develop appropriate consumer protections, we must have the best facts and data,” said CFPB Director Richard Cordray. “This database will be a valuable tool for regulators and researchers and we look forward to partnering with FHFA on this important work.”
Because the database is designed to streamline the entire mortgage lending process, rather than at the individual level, the database will contain no personally identifying data at all, but rather information culled from a sampling credit report files, information from the existing Home Mortgage Disclosure Act database, and more.
With all this data available, the agencies will be able to keep tabs the overall health of the mortgage industry and gain new insight into how consumers make decisions, the report said. They will also be able to monitor how successful new regulations are across the whole market, and more fully understand how the massive debts mortgages result in will impact borrowers.
The mortgage market is still recovering, and a significant effort on the part of the federal government may allow it to continue growing more safely than it did in the period prior to the housing bubble burst.