[TheBank]

Is an application to purchase a lot with a burned home HMDA reportable? The home is not burned completely to the ground, just looks burned on the inside based on the picture. The applicant planned to tear down the home, he just wanted to get the lot purchased. He planned to build in the future, but not with funds from this loan application. The application was denied due to the applicants credit history so we do not have details of the extent of damage that might be in an appraisal. Should this application be included on the HMDA LAR?

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[rcooper]

You’ll probably get different opinions from everyone you ask about this. There isn’t clear guidance on this kind of situation. If it’s still a dwelling – in my opinion that would be a home that is still standing and can be repaired – then I would consider it a purchase, because even though the applicant may have planned to demolish it, it would meet the definition of home purchase. If the dwelling is beyond repair, at that point I would not consider it a dwelling. Either way, your conclusion about the structure needs to be well documented.

[TheBank]

I would agree with that, and since we don’t have an opinion as to whether a portion of the home can be saved, I plan to include the application on the HMDA LAR. Thanks!

[Author]

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