Effective with applications taken after January 1st 2018, all lenders are now required to ask expanded questions on race and ethnicity. The reason for the change is to allow government monitoring of lenders to make sure they are serving all applicants fairly and evenly. If the data shows a greater percentage of denied applications for a minority group, or a lender with predominantly applicants from one ethnicity, government regulators will step in to determine if the lender has violated any Fair Lending rules.

One of the positive aspects of the new HMDA (Home Mortgage Disclosure Act) requirements is that races that were previously group together are now split apart. Especially here in Hawaii, we are happy that groups of people aren’t lumped into one category. For example, Asians included East Indian, Chinese, Japanese, Filipino, Korean, and Vietnamese. Thankfully these groups now get their own boxes on the new application.

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