[jholzknecht]

We are not familiar with the concept of an “Act of Donation.” It appears that Joe Smith is assuming the debt of ABC Company. An assumption is reported as a purchase loan if there is a written agreement whereby your bank accepts Joe as the obligor on the loan to ABC. We suspect a close analysis will show that the transaction is not an assumption, therefore the loan is not a purchase loan. We agree with your analysis that the loan is not a refinance. There is no indication that the loan is for home improvement.

If the loan is not home purchase, home improvement or refinance, it is reported as “other.”

[lriddick@applecreekbank.com]

If we have a loan that the customer owns their primary residence free and clear of any liens and wishes to have cash out to purchase an investment property. It is not a refinance because we are not paying off another lien. Would you report this as a purchase or other purposes?

[Kimberly Boatwright, CAMS, CRCM]

Since the proceeds are being used to purchase investment property it would recorded as a purchase. Anytime proceeds will be used to purchase a new property it is to be recorded as a purchase.

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