But in the aftermath, banks faced criticism for going too far in the other direction -- for tightening up their lending standards excessively and making far fewer loans than they had during the housing boom. Of course, for the individual, it can be hard to tell what banks are doing: You can only really discover if you can get a loan, or not.
Now, though, thanks to a little-known federal law and the efforts of the Consumer Financial Protection Bureau, you can check up on banks in your area to see if they're serving the mortgage loan needs of their local-community customers.
Earlier this month, the CFPB announced that it had launched a new set of tools to help Americans learn more about the mortgage-lending practices of banks. In particular, one visualization tool makes it a lot easier to see if banks are complying with laws meant to prevent discrimination in mortgage lending.
Where Did This Data Come From?
A federal law known as the Home Mortgage Disclosure Act has been around for nearly 40 years. It requires banks and other financial institutions to gather and disclose information about the mortgage loan they make. Under the Dodd-Frank legislation passed in 2011, the CFPB took over authority for making rules under the HMDA from the Federal Reserve.
As a result, the CFPB gathered huge amounts of information from banks -- about 18.7 million records from 7,400 lending institutions, according to the CFPB's figures.
But rather than letting that information sit in storage or compiling a long, arduous report, the CFPB instead decided to create an interactive map- and chart-based tool that puts all that data in an easy-to-understand format where anyone can see it.
How Are Mortgage Lenders Doing?
Based on the data, the trends over the past several years have been fairly encouraging.
Nationwide, from 2011 to 2012, the number of home-purchase applications rose more than 10 percent to about 3.45 million. Roughly two-thirds of those applications resulted in actual mortgage originations, up slightly from figures in previous years.
Lender originations for home-improvement loans increased at an even faster pace, rising 23 percent from 2011 to 2012. And because of low mortgage rates, refinancing activity accelerated even more sharply, posting 50-percent gains in 2012 from the previous year's number of refinancing-loan originations.
But the more interesting part of the tool is how it can give you very specific local data.
One national map of mortgage originations shows that California, Florida, and areas of the Midwest and West showed the biggest jumps in mortgage originations. San Diego County saw originations rise 52 percent in 2012, while Miami-Dade County experienced a 58 percent jump. Detroit's Wayne County showed a 95 percent rise in mortgages.
The tool allows you to filter by metropolitan area as well as providing some general information at the county level.
With breakdowns of activity by loan purpose, you can get a sense of what homeowners are doing with their loan proceeds. Further data show the types of loans mortgage borrowers are using, with breakdowns among conventional, FHA, Veterans' Affairs, and Department of Agriculture loans.
Be a Bank Watchdog
The CFPB hopes that consumers and researchers alike will look more closely at its mortgage data and find new ways for borrowers to learn more about the mortgage-lending market.
For now, the information you can find at the CFPB website will reveal a lot about the health of your community's housing market and the willingness of banks to help your community rebound and prosper.
You can follow Motley Fool contributor Dan Caplinger on Twitter @DanCaplinger or on Google+.