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Unsecured Home Improvement Loans & HMDA
Answer by David Dickinson, BOL Guru
BIO AND CONTACT INFO
Question: If a loan is carried on a credit union's books coded as a signature loan (unsecured), while the purpose listed on the loan application is for home improvements; Would this signature loan have to be reported under the Home Mortgage Disclosure Act?
Answer: No. Only if the stated purpose was home improvement AND the bank books it that way it would be reportable.
12 CFR Supplement I to Part 203--Staff Commentary [Effective until December 31, 2003]
2(f) Home-improvement loan.
1. Definition. A home-improvement loan is a loan that is made for the purpose of home improvement and that is classified by the institution as a home-improvement loan. (Appendix A of this part, Paragraphs IV. and V.A.5. Code 2.)
As a side note, watch that you do not collect monitoring information when the loan is not subject to data collection under Regs. B and C.
First published on BankersOnline.com 3/17/03
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