While HMDA is in many ways a simple database, there are still many things to watch out for, said Allentown Morning Call reporter David Washburn. Here are a few of the suggestions he made for avoiding pitfalls:
Use an application that can generate crosstabs. Spreadsheets and database managers don't have enough power to create quality crosstabs for HMDA analysis. A field called "edit status" tells whether there is an error in the record, but it doesn't say where the error is. Records that are marked as having errors should be thrown out. Some of the records have N/A in the fields for race or income. These records must also be thrown out. Separate one-to-four family dwellings from multifamily and commercial property when generating percentages. When combining HMDA and census data, if your census records are broken down into blocks, you will have to spend some time adding them together into tracts in order to compare them with HMDA records. Look out for different banks with the same ID number. If two banks merge after the reporting period, they will be reported as one institution although they were separate entities at the time the data were generated. Double check your numbers with each bank. If their numbers are different, make sure they're breaking down the data the same way you are. For instance, if you're looking at just one-to-four family homes, make sure their numbers don't reflect multifamily dwellings as well.