Loan Officer Practice Exam

The Home Mortgage Disclosure Act is used to track compliance with which other act?

1. SAFE Act

2. Equal Credit Opportunity Act

3. Bank Secrecy Act/Anti-Money Laundering Act

4. Gramm-Leach-Bliley Act

The correct answer is: Equal Credit Opportunity Act

The Home Mortgage Disclosure Act (HMDA) is primarily aimed at promoting transparency and accountability in the mortgage industry by requiring financial institutions to report data about mortgage applications. This act is designed to ensure compliance with the Equal Credit Opportunity Act (ECOA), which prohibits discrimination in lending based on race, color, religion, national origin, sex, marital status, or age. By collecting data on mortgage applications, the HMDA provides insight into how different demographic groups are treated by lenders, making it a vital tool in assessing whether financial institutions are complying with the ECOA. The data collected through HMDA allows for a better understanding of lending patterns and helps in identifying potential areas of discrimination in the mortgage lending process. In this way, HMDA supports the overarching goals of the ECOA by ensuring that all individuals have fair access to mortgage credit.