HMDA - Non-Reportable Bridge Loan?
Answer by David Dickinson, BOL Guru Guru Bio
Question: I have paid off our customer's first mortgage and will be using all of the customer's remaining equity as a down payment on the purchase of their new primary residence. I set up the new loan as a single pay loan due in six months. The repayment on this loan will be the sale of the existing home. Is this considered a bridge loan and not HMDA reportable?
Answer: Bridge loans are not defined in HMDA. However, what you describe is commonly known as one. I agree you should not report this loan. I recommend your institution define what a bridge loan is as well as temporary financing (it's not defined either). Then you apply these terms consistently. You may benefit from reading the article "HMDA Temporary Financing" found at our website.
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