Loan Origination Rate
The share of home-purchase mortgage applications in a tract that resulted in a loan being originated.
The share of home-purchase mortgage applications on properties in a tract that ended with a loan actually being made.
Lenders covered by the Home Mortgage Disclosure Act report an outcome for every application they act on. Regulation C requires them to record "whether a covered loan was originated or purchased" and, where no loan resulted, whether the application "was approved but not accepted, denied, withdrawn by the applicant, or closed for incompleteness" (12 CFR 1003.4(a)(8)). The origination rate compares the first of those outcomes against the applications a lender acted on.
An origination rate is not the inverse of a denial rate. Applications also end in withdrawal by the applicant, in incomplete files, and in approvals the applicant declined, so the two rates move somewhat independently. A tract where many applicants walk away can show a low origination rate without a high denial rate.
This family covers home-purchase lending only. Refinances, home-improvement loans and other purposes are reported separately in the register and are treated as separate measures here.
Metrics in this family#
Loan origination rate
levelOriginated home-purchase loans as a share of home-purchase applications acted on in the tract, combined across the three most recent years of reported activity. Pooling several years together is what makes the measure usable at tract level, where a single year often holds only a handful of applications.
Considerations#
The register covers institutions that meet the reporting thresholds set in Regulation C, currently 25 closed-end mortgage loans in each of the two preceding calendar years, or 200 open-end lines of credit (CFPB). Lending by smaller institutions falls outside the data entirely, so an origination rate describes reported lending rather than all lending in a place.
The public file is the modified register, which the Bureau redacts and alters before release to protect applicant and borrower privacy (CFPB). The fields used here are not among those altered, but the modification is why loan-level detail cannot be reconstructed.
Data are published soon after the annual filing deadline. Later static releases of the same year incorporate resubmissions and late submissions (FFIEC), so recent years can shift as filings are corrected.
Applications are recorded at the property's tract, not the applicant's current address. Tracts with very little reported purchase activity carry an unstable rate.
References#
- 112 CFR 1003.4(a)(8)https://www.consumerfinance.gov/rules-policy/regulations/1003/4/
- 2CFPBhttps://www.consumerfinance.gov/about-us/blog/changes-to-hmda-closed-end-loan-reporting-threshold/
- 3CFPBhttps://www.consumerfinance.gov/data-research/hmda/
- 4FFIEChttps://ffiec.cfpb.gov/documentation/faq/static-dataset-faq