A review was conducted of literature which details how HMDA data may be utilized to enable analysis of levels of access for different population groups. Relevant published materials were limited, but on-line searching produced useful material describing how the data has been used to highlight racial inequity in credit access. We also found "HMDA highlights" which were helpful in illustrating how the data is typically manipulated. Several banking industry publications offered insight into the "how to’s" of compliance with fair lending requirements from the lender’s perspective. Finally, a review of government publications and Congressional hearings provided a general background in the history of HMDA’s records.

Contact with fair lending advocacy organizations was highly informative. The Center for Community Change and the National Community Reinvestment Coalition provided studies which have attempted to document racial discrimination either in specific areas, or by specific lending institutions. These studies included extensive tabulations of HMDA data, which were instructive for reviewing the methodologies of past research comparable to this project.

The literature review revealed that while various studies have examined the issue of race, very little research has explicitly addressed the issue of women’s access to mortgage credit. (See bibliography for full list of references.)

The broad objective concerning the HMDA data was to provide a comprehensive analysis of home mortgage lending patterns in New Jersey by gender, and to highlight and examine any evidence of differential access to mortgage credit. The HMDA data for 1994 was processed to examine variables which reveal women’s performance in the home lending market. Multiple indicators were utilized to examine comparable subgroups of men and women based on specific field variables in the data set.

An extensive computer tabulation of 1994 HMDA data for New Jersey was conducted. Over 320,000 records were searched. Approximately 15,000 records were deleted for various edit problems such as inconsistencies in the data. In addition, over 29,000 records were not considered which were listed as "loan purchased by your institution," under "Action Taken" in the HMDA file. Only those records were used which involved an application for a "home purchase (one-to-four family)" mortgage.

The data was summarized for the state as a whole. Variables were examined, e.g. applicants’ gender and race, based on the primary applicant and did not include co-applicant information. Data was also compiled for the fifty financial institutions which had the highest amount of "home purchase" loan originations in the state and which were either covered by CRA as a bank or a mortgage company owned by a bank. The names of the financial institutions used in this report were those in effect as of 1994. Due to the many mergers which have taken place in the banking industry since then, some of these financial institutions have merged and acquired new corporate names.

The following list of indicators documents the field variables chosen for subgroup comparisons. These indicators rely on the format of information contained in the Loan Application Register of the HMDA data. It should be noted that not all HMDA records found were complete for each indicator; some of the information was optional. For example, denial reasons were missing on some of the files.

Applicant totals of originations, denials, and withdrawals, categorized by gender, were aggregated for the state and for the fifty selected financial institutions. Withdrawals included the categories under "Action Taken" in the HMDA data of "Approved but Not Accepted," "Withdrawn by Applicant," and "File Closed for Incompleteness".

All ranges used in this report are based on the same criteria. The median value of the variable is computed and the range is then divided into proportions of the median, according to the following four categories:

The ranges for the variable Loan Amount are based on the median home value. We computed the median home value to be $162,300 which is the 1989 census figure. It was not necessary to update this amount. A review of data supplied by the National Association of Realtors on home values around the state during the period 1989 - 1994 showed no change.

The ranges then for Loan Amount would be the amount of the loan as a percentage of the $162,300 as follows:

Home mortgage lending patterns for New Jersey were examined based on a regional analysis of the state. The state subdivisions into north, central, and south were created using the following county breakdown:

Racial delineations were defined as Black, Hispanic, White, and Other (the latter included American Indian or Alaskan Native, Asian, or Pacific Islander).

Categories for the variable Incomewere based upon the New Jersey median family income for 1993, which was determined to be $55,335. This income amount was computed by taking as a base the state median family income from the 1990 census of $47,589 and updating it to the 1993 year. Figures for 1993 were computed because the applicant income listed in the 1994 HMDA data would be the applicant’s 1993 income. Data on median family income changes in the 1990’s was unavailable so instead the growth in per capita income from 1989-1993 was used. The per capita income growth from 1989-1993 based on data from the Regional Economic Information System was 16.3%. The base of $47,589 was multiplied by an increase of 16.3% which yielded the figure of $55,335. Therefore, the ranges for the variable Income were as follows:

Computations were based on mortgage loan applications not originated. HMDA records list up to three denial reasons. These reasons were used as the basis for our analysis.

This variable was based on which census tract the property was located and the proportion of census tract to MSA income. The census tracts were then categorized low-, moderate-, middle-, and high-income based on the ranges described above.

The amount of Portfolio and Non-portfolio loans linked to the lending institution. Portfolio loans are the loans held by the originator. Non-portfolio loans are the loans that have been sold into the secondary market. Non-portfolio loans included categories 1-9 under "Type of Purchaser" information in the HMDA file.