Two Agencies Merge Resources to Collect Data on Mortgage Holders

Nearly 230 million Americans will soon be required to disclose personal information about their families and financial lives in a new national database created by two federal agencies. The agencies say that the database will benefit the government and the public regarding the changing and evolving housing finance market. Critics are questioning the need to expand the data collection because of privacy and security concerns.
The Federal Housing Finance Agency (FHFA) and the Consumer Financial Protection Bureau (CFPB) posted a notice in the Federal Register on April 16th about the expansion of their joint National Mortgage Database (NMD). The period for public comment ended on May 16th, only 12 comments were received.

U.S. House of Representative Jeb Hensarling R-Texas and Senator Mike Crapo R-Idaho in a May 15 letter to CFPB Director Richard Cordray and FHFA Director Mel Watt stated, “This expansion represents an unwarranted intrusion into the private lives of ordinary Americans.” Cordray told a committee headed by Hensarling that the database will only contain “aggregate” information and not personally identifiable data.

The agencies said that the mortgage market is the largest single market for consumer finance, but there has been a lack of comprehensive national data. The FHFA and CFPB point out that this is merely an expansion and not something new as multiple federal and state agencies and private vendors already collect much of this information. This initiative would create one point of entry for all data.

The CFPB and FHFA’s examples of how the NMD can support their work include:

Conducting surveys for better understanding of consumer experiences and decision making in the areas of distressed homeownership and mortgage shopping

Understanding the impact of consumers’ debt burdens due to other debt

Monitoring new product performance in the marketplace which may help regulators identify possible issues and new risks

Monitoring loan performance so that policy makers can better understand how different loan products are used and how they perform

Allowing analysis of homeowners with more than one mortgage and how they are performing

The National Mortgage Database will collect information such as:

Name, address and phone number

Social security number

Gender, race, ethnicity and religion

Marital status

Composition of household (number and ages of males, females, children)

Household income

Credit score

Education records

Military status/ records

Employment status/ records

Bank account numbers

List of “financial events” in the last few years

List of other assets/ wealth

Current mortgage balance and monthly payment amount

Payment delinquency records

Bankruptcy records

Credit card numbers, balances, charge limits and highest balance charged

Minimum payments due on all loans

Property attributes (square footage, room count, lot size)

Sale price and down payment amount

Mortgage information (dates, interest rate, amount, loan servicer)

The NMD was created because of a 2008 Housing and Economic Recovery Act (HERA) mandate as a result of Congress requiring a monthly mortgage survey. Congress didn’t explicitly require or authorize the data collection in the form of the NMD, therefore the U.S. Chamber of Commerce disagrees with it.

Do you think that the National Mortgage Database will benefit consumers and the government?

Resources:

Mortgage News Daily. “FHFA, CFPB to Cooperate on National Mortgage Database” 4 June 2014.http://www.mortgagenewsdaily.com/11012012_mortgage_information.asp

Washington Examiner. “New federal database will track Americans’ credit ratings, other financial information” 4 May 2014. http://washingtonexaminer.com/new-federal-database-will-track-americans-credit-ratings-other-financial-information/article/2549064

Federal Register. “Notice Privacy Act of 1974; System of Records” 4 May 2014.https://www.federalregister.gov/articles/2014/04/16/2014-08566/privacy-act-of-1974-system-of-records#h-16

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