5th District Footprint
October 2016

This issue of 5th District Footprint examines the change in the percentage of mortgage denials based on the applicant’s debt-to-income ratio from 2013 to 2014 and from 2014 to 2015.
Debt-to-Income Ratio-Based Mortgage Denials in the Fifth District
“What is a debt-to-income ratio?” Consumer Financial Protection Bureau (2015).
HMDA data do not represent all mortgage applications. Depository financial institutions with assets less than $41 million, $42 million, or $43 million as of December 31 of the preceding year were exempt from HMDA reporting in 2013, 2014, or 2015, respectively. Non-depository financial institutions with less than $10 million in assets as of December 31 of the preceding year were exempt from HMDA reporting. The mortgage applications represented by this data are applications for conventional home-purchase mortgages for one-to-four family dwellings secured by a first lien.
“How has the percentage of consumer debt compared to household income changed over the last few decades? What is driving these changes?” Federal Reserve Bank of San Francisco (July 2009); “Changes in U.S. Family Finances from 2010 to 2013: Evidence from the Survey of Consumer Finances,” Federal Reserve Bulletin 100(4) (September 2014).
2007 is the earliest year for which HMDA data is available from the CFPB.
From 2014 to 2015, Maryland, North Carolina, and Virginia experienced percentage point changes that fell within a margin of error and so cannot be classified as increases or decreases.
The number of debt-to-income ratio-based denials in Roane County, West Virginia was zero out of 15 denials in 2013, 11 out of 14 denials in 2014, and three out of 14 denials in 2015.
Mecklenburg County, North Carolina, had 204 debt-to-income ratio-based mortgage application denials in 2013, 245 in 2014, and 238 in 2015.