Which law requires lenders to collect borrower information for first mortgages and home improvement loans?

The Home Mortgage Disclosure Act (HMDA) is the law that requires lenders to collect and report certain information about borrowers for first mortgages and home improvement loans. The primary purpose of HMDA is to provide the public with information about how financial institutions are serving the housing needs of their communities. It also aims to help identify possible discriminatory lending patterns.

Under HMDA, lenders are required to gather and maintain data regarding the ethnicity, race, sex, and income of applicants and borrowers, ensuring transparency and promoting fair lending practices. This regulation allows both government entities and the public to access information related to mortgage lending that can indicate potential disparities in access to credit.

The other options deal with various aspects of lending. For example, the Equal Credit Opportunity Act (ECOA) prohibits discrimination in granting credit but does not specifically mandate data collection for reporting purposes like HMDA does. The Truth in Lending Act (TILA) focuses on disclosure of credit terms and costs but does not require the collection of borrower demographics. HEOPA, which appears to be incorrectly stated, does not exist under this context.

Thus, HMDA is distinctly focused on ensuring that lenders collect borrower information to promote transparency and fairness in the lending process for mortgages and home improvement loans.