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Understanding the Home Mortgage Disclosure Act (HMDA) is crucial for mortgage loan officers because the data required by the law helps the Federal Financial Institutions Examination Council (FFIEC) determine whether lending institutions meet the housing/credit needs of U.S. communities. The data helps uncover discriminatory lending practices and direct community development block grants to specific communities, in order to encourage private investment. FFIEC collects data indicators on race and income distribution of borrowers, denial rates by race and income, and subprime loans/lenders by race.
