The Federal Housing Administration (FHA) insures mortgages against the risk of foreclosure. Since its inception in 1934, FHA has insured over 37 million mortgages on single-family homes. This requires FHA to store data on a large number of mortgages. Because of the large number of mergers/acquisitions among mortgage lenders, it is sometimes difficult for the surviving lenders to maintain accurate databases. As a consequence, such lenders do not always transmit accurate/timely data to FHA on the termination of FHA-insured single-family mortgages that they are servicing. This, in turn, means that FHA’s database has many mortgages listed as “active” that have in fact been terminated. In addition, FHA made a decision many years ago to omit the property address of insured mortgages from its databases on single-family mortgages because of the high cost of computer storage at that time. Although this decision was later reversed as such costs declined, even in the year 2008, FHA had a substantial number of “active” mortgage records without a corresponding property address.
In order to improve the quality of FHA’s databases in these two aspects, we have applied a number of internal consistency checks and record linkage techniques. The first approach was to use a variety of internal consistency checks to identify “active” mortgage records whose underlying mortgages had in fact terminated. The second approach involved matching FHA records with corresponding records of the Government National Mortgage Association (GNMA). This second approach allowed us to (1) obtain property addresses from the GNMA database and add them to the FHA database as well as (2) identify additional “active” FHA mortgage records whose underlying mortgages had terminated.
We have employed a variety of internal consistency checks to identify and subsequently remove “duplicate” mortgage records from this database.
