HMDA - Extending a Current Obligation
Answer by David Dickinson, BOL Guru Guru Bio
Question: With regard to a refinance under HMDA guidelines, when extending a current obligation with a new promissory note, but keeping the same note number is it HMDA reportable? I'm not sure how to interpret the phrase "satisfies and replaces and existing obligation."
Answer: First, keeping the same note number or assigning a new one is an internal record keeping issue and has nothing to do with the legal definition of refinancing. You say you have a new promissory note so that means legally the new note satisfies and replaces the old note. Therefore, this is a refinancing. Had you modified the terms of the loan so it was not paid off with a new loan, you would not have a refinancing.
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