Agencies Roll Out Mortgage Database, Promise Consumer Data Is Private

NEW YORK (TheStreet) -- Buying a house is a laborious, complicated and paper-intensive process, and many buyers wonder if the odds aren't stacked against them in getting a fair shake from lenders.

Two U.S. government agencies -- the Federal Housing Finance Agency and the Consumer Financial Protection Bureau -- have joined up to, in their words, make the mortgage lending process fairer and easier to understand.

How do they propose to accomplish that? With the rollout of a "National Mortgage Database" that will help regulators see comprehensive and detailed data on mortgage loans and lenders across the country and ensure consumers are getting a square deal from lenders.

In addition, the agency says federal housing policy-makers can use the database to keep up with the industry, and to, as the CFPB puts it, "better understand emerging mortgage and housing market trends."

The agency says that, up to this point, regulators working on behalf of homebuyers didn't have a single place to go to access a broad range of mortgage loan data.

Both agencies hope the national database is a game changer for consumers and for housing policy makers, who will have access to a wide range of mortgage loan data, including:

  • Data "spanning the life" of a mortgage loan.
  • Specific mortgage products and their terms.
  • Properties bought across the U.S.
  • Properties refinanced across the U.S.
  • A monthly mortgage survey run by the FHFA.

The database has something of a "big brother" angle to it, as well. Included in the database will be homeowner's mortgage payment histories and credit profiles, as well as data on auto loans and student loans. But a report from the CFPB insists that consumers' personal financial data will be safeguarded, with information culled from sample credit and mortgage data and not "personally identifiable":

"The database will not contain personally identifiable information and appropriate precautions will be taken by the agencies to ensure that individual consumers cannot be identified through the database or through any datasets that may be made available to researchers or the public."

The CFPB says it needs specific credit and payment history data to properly monitor how mortgage products are performing and see whether they're a good deal for consumers. The survey aspect will help regulators understand how consumers make home-buying decisions and what they see as risks associated with buying a home.

"To understand what is going on in the mortgage marketplace and develop appropriate consumer protections, we must have the best facts and data," CFPB Director Richard Cordray says. "This database will be a valuable tool for regulators and researchers and we look forward to partnering with FHFA on this important work."

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