MBA, Trade Groups Voice Concerns over Proposed FHFA Borrower Survey

The Mortgage Bankers Association and nearly a dozen other industry trade groups yesterday expressed concerns that a proposed Federal Housing Finance Agency survey to collect information on mortgage borrowers could be overly extensive and an endangerment to customer privacy.  

The proposed survey, part of a National Mortgage Database project with the goal of including detailed information on more than 10 million borrowers. FHFA intends to collect this information through a voluntary survey of individuals who currently have a first mortgage loan secured by single-family residential property. The survey would be, in effect, an updated version of FHFA’s existing National Survey of Mortgage Borrowers.  

The proposed survey would use a questionnaire consisting of 80 to 85 questions intended to elicit information from mortgage borrowers about their loans. FHFA’s stated goal of the Database is to “support policymaking and research efforts to understand emerging mortgage and housing market trends.”  

However, MBA and the trade groups said while it’s appropriate for the government to better understand the residential mortgage markets, they questioned FHFA’s proposed approach.  

“We are concerned, however, that the Database (1) is overly extensive; (2) poses a significant danger to consumer privacy through re-identification; and (3) is duplicative of other databases,” the letter said.  

The trade groups said the Database should not be introduced until several steps are taken, including consultation with the Consumer Financial Protection Bureau to ensure that FHFA and CFPB data cannot result in re-identification of consumers. The steps should also include soliciting additional input on the survey topics and questions.  

The letter said considering the extent of the Database and the number of individuals who will be allowed access, as well as the “seemingly boundless capabilities of hackers and other intruders,” a very strong likelihood exists that, even under the best circumstances, data from the system could be leaked or breached and could result in harm to consumers.  

“Clearly, the information contained in the Database is broad and highly sensitive,” the letter said. “While any breach would be a serious problem, the problem of re-identification is even more serious. Data in the Database can be pieced together with data from other private and public databases to identify individual borrowers and associate an even greater amount of confidential information with them. There would be great harm to consumers if the information were to be released carelessly or unwittingly, or if it were to be accessed by individuals aiming to do harm.”  

MBA and the trade groups expressed “profound concerns” about large-scale uncoordinated data collection by the government that creates real risk for consumers. “We strongly encourage the FHFA to review the goals of this proposed survey, identify genuinely unique data points not otherwise captured by existing surveys, utilize focus groups and, ultimately, reissue a more complete survey for comment.”  

Joining MBA in the letter: the American Bankers Association; the American Financial Services Association; the American Land Title Association; the Consumer Bankers Association; the Consumer Mortgage Coalition; Credit Union National Association; the Housing Policy Council of the Financial Services Roundtable; the Independent Community Bankers of America; and the National Association of Federal Credit Unions.