The Consumer Financial Protection Bureau (CFPB) and Federal Housing Finance Agency (FHFA) said Thursday they are teaming up to create a first-of-its-kind mega-database of mortgages to track market trends and support policymaking research.
While multiple state and federal databases exist, there is no single database that contains all the information in one place, the agencies said. It's the first step in a broader strategy to help streamline data for research and policy analysis, and to ensure comprehensive information is more readily accessible for monitoring the market.
"If we look back on the recent crisis, one of the biggest things regulators learned was we didn't have a single source of comprehensive financial data, especially when it came to the housing market, which is one of the reasons why the Dodd-Frank Act created the Office of Financial Research," Isaac Boltansky, an analyst with Compass Point Trading and Research, said. "A better source of data about borrower characteristics will better inform policymakers in the future."
Despite the assurances about protecting borrowers' information, observers raised concerns about the high level of detail the agencies plan to collect, and the cost of such an undertaking.
"It's a little scary," said Laurence Platt, a financial services practice leader at K&L Gates. "They're collecting very detailed information about all borrowers and there is a question about how they are really going to use it."
The agencies plan to build the database by matching a nationwide sampling of credit bureau files on borrowers' mortgages and payment histories with "informational files," including data released under the Home Mortgage Disclosure Act and property valuation models "to create a comprehensive picture for each mortgage."
The database will include information spanning the entire life of a loan, from origination to servicing, and will include a variety of borrower characteristics, the agencies said in a press release.
While the database won't contain any personally identifiable information, it will include loan-level data about each mortgage, including the borrower's financial and credit profile, the loan terms, the property purchased or refinanced and the ongoing payment history of the loan.
According to a government contract notice, the FHFA awarded an $11.1 million to Experian Information Solutions to help collect and compile the data and build the database.
