[Anonymous]

I hope everyone is enjoying this gorgeous weather!!!

I have a HMDA questions for you. I believe I’m overthinking the situation, but I need some confirmation.

The Situation: We did a 30-year loan to pay-off a temporary financing loan [6 months term – Purpose was to purchase the dwelling and perform some home improvements on the dwelling.] which is secured by a dwelling. How should I report this loan, Home Purchase or Refinancing?

Thanks!

[rcooper]

Answer by Kowsley and Rcooper:

We’ve heard differing opinions on this, but we believe it would fit the definition of refinancing.

Refinancing means a new obligation that satisfies and replaces an existing obligation by the same borrower, in which:

(1) For coverage purposes, the existing obligation is a home purchase loan (as determined by the lender, for example, by reference to available documents; or as stated by the applicant), and both the existing obligation and the new obligation are secured by first liens on dwellings; and

(2) For reporting purposes, both the existing obligation and the new obligation are secured by liens on dwellings.

If this was a construction/perm loan or permanent financing to replace a construction-only loan, Reg C commentary says it would be a purchase.

[Author]

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