Would-be home buyers now have easy access to a database of millions of mortgage applications through Homethinking.com, helping them see lenders who have the biggest presence in their market and details about the loans they’ve made.

Providing a user-friendly way to access the Federal Reserve’s Home Mortgage Disclosure Act (HMDA) database could help home buyers and real estate professionals choose a lender, and determine how past lending practices may affect particular markets as the credit crunch continues, said Homethinking LLC founder Niki Scevak.

Scevak founded Homethinking.com in 2005 to help home buyers choose a Realtor based on actual transaction data. The company is expanding the concept to lenders with today’s rollout of Mortgage.homethinking.com.

Clicking on a state or county shows the percentage of subprime loans, average loan size, loan-to-income ratio, and other statistics that can help home buyers determine how past lending practices may affect future market performance.

(Although HMDA tracks "higher cost" loans as defined by the Home Ownership and Equity Protection Act, rather than "subprime," Homethinking.com and others who analyze HMDA data sometimes use the terms interchangeably.)

The site also shows the top 10 lenders at the nation, state or county level. Clicking on any lender reveals the same set of statistics, including total applications and the percentage rejected.

The site allows bloggers, real estate professionals or anyone who’s so inclined to embed the charts the site generates into their Web sites or e-mail messages. Scevak said the charts can help Realtors and mortgage brokers advise clients who are worried about their housing market, and build stronger and more credible relationships.

HMDA data is collected at the Census tract level, and Mortgage.homethinking.com will eventually return more "granular" results, Scevak said.

Another limitation of the site is that HMDA data is released on an annual basis, and it takes the Fed several months to get it out. While Homethinking.com provides access to the latest HMDA data — 27.5 million loans and loan applications filed in 2006 — much of that information is now two years old.

In a state like California, three of the top 10 lenders have since gone out of business or are no longer making loans. Scevak acknowledged that the last two years have been "a very unique time for the mortgage industry," with "a fair percentage of lenders having gone bankrupt or merged in some kind of fire-sale transaction."

Mortgage.homethinking.com won’t generate a borrower’s "sole decision criteria," he said, but can be used to make up a short list of lenders to talk to.

Scevak said the 2-year-old HMDA data is a useful tool for assessing which lenders have been most active in a market, and what kind of loans they have been making. A high percentage of subprime loans or unusually high loan-to-income ratios might be an indication of trouble down the road, he said, as borrowers facing interest-rate resets on adjustable-rate mortgages (ARMs) may have difficulty making payments.

The same statistics can be used to tease out safe markets, such as Manhattan, Scevak said, where lenders maintained tighter standards during the boom.

Using HMDA data to predict the impact of resetting ARM loans in a given market, however, is problematic.

When launched today, Mortgage.homethinking.com presented a narrative with each query that claimed to assess how "at risk" a particular market is to the "subprime mortgage crisis."

The narrative equated the number of subprime loans in a market to the percentage of loans that will reset to higher rates in 2008. Those numbers aren’t interchangeable, however, because not all subprime loans are ARM loans, and many ARM loans are made to prime borrowers. In addition, while many hybrid ARM loans reset after two years, others may adjust after three or five years.

Scevak acknowledged that while Mortgage.homethinking.com makes the assumption that the majority of subprime loans are ARM loans that will reset in two years, the language in the narrative will be changed to note that there is not a one-to-one relationship between subprime loans made in 2006 and 2008 ARM resets.

The Federal Reserve doesn’t provide the public with an equally user-friendly way to browse the HMDA data it collects from lenders (the raw data is available here). But last month the Federal Reserve system rolled out dynamic maps that show the recent performance of subprime and alt-A loans at the state, county or ZIP code level.

Using data from FirstAmerican CoreLogic LoanPerformance, the maps provide revealing statistics, including loans in foreclosure per 1,000 units, share of ARM loans with initial resets in the next 12 months, and real estate-owned properties per 1,000 units.

If browsing the HMDA data offered by Mortgage.homethinking.com gives home buyers a glimpse into the future, the LoanPerformance data served up by the Fed lets you see the very recent past. The maps, maintained by the Federal Reserve Bank of New York, are currently based on information from December 2007.

Other tools for assessing a housing market’s prospects include risk indexes published by companies such as First American CoreLogic and PMI Mortgage Insurance Co., which take into account past volatility in home prices and economic conditions such as unemployment. PMI’s Market Risk Index attempts to predict the probability that prices will decline in a given market in the next two years (see story). First American CoreLogic’s LoanPerformance House Price Index relies on repeat sales transactions from the company’s database (see story).

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