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In reviewing our LAR we have found a couple of scenerios that are not “the norm”. Can someone help with clarification as to whether they are HMDA reportable or not?
1) customer purchased a foreclosed 1-4 with their own funds. They then came to the bank and borrowed the funds to “reimburse” themselves. We made the customer a loan, proceeds going to the customer and secured the loan with the 1-4 they had purchased with their funds. Is this loan a HMDA purchase loan? I realize it would be a HMDA reportable loan, if when it matures we refinance it.
2) we have a customer who has a revolving line of credit secured by his home (it is not a HELOC, but a business LOC), he uses this line for lot of things, one being he purchases mobile homes for rental income. He also may use it to make improvements to rental properties he already has. Is it HMDA, if so, with what purpose? 😕
The first loan does not appear to be for home purchase, home improvement or for refinance, and therefore is not HMDA reportable.
When Regulation C refers to lines of credit it refers to Home Equity lines of credit subject to Regulation Z. Apparently your line of credit is not covered by Regulation Z, so there is no direct discussion of this product in Regulation C. But the guidance for lines of credit states that reporting of lines of credit is optional, and if reported, only the portion that is for home purchase or home improvement is reported. If you choose to report, report that portion of the line that the borrower indicates at application is for home purchase or home improvement.
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