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#173170 - 03/24/04 07:28 PM
Ist this a refi or a purchase?
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Platinum Poster
Joined: Nov 2001
Posts: 713
Laramie, WY. USA
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I need some help thinking through this one. My applicant has occupied a modular home since 1995, as his primary residence. It is on leased property. The applicant is the only one who lives in the home, there is, however a co-owner of the home, as shown on the title. The co-owner wants to sell her interest, and thus my customer's request, to purchase the co-owner's interest. The title is currently lien-free.
I'm feeling stupid, but I can't decide, is this a refi or a purchase for HMDA and other disclosure purposes? (Of course no R/E, no RESPA). The collateral is the equity in the modular. Maybe this is what's stumping me.
Thanks for your thoughts.
Wyogirl
Last edited by wyogirl; 03/24/04 07:30 PM.
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#173171 - 03/24/04 07:37 PM
Re: Ist this a refi or a purchase?
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10K Club
Joined: Jul 2001
Posts: 84,347
Galveston, TX
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Sounds like a purchase of a half (or some %) interest to me. So both parties - old co-owner and new co-owner - are pledging the collateral - and new co-owner is signing the note?
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#173172 - 03/24/04 07:47 PM
Re: Ist this a refi or a purchase?
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10K Club
Joined: Aug 2002
Posts: 47,673
Bloomington, IN
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This would be similar to a spouse buying out another spouse in a divorce settlement.
RESPA does not apply - No Land. HMDA applies - we would report as a refinance. ROR will apply.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#173175 - 03/24/04 08:06 PM
Re: Ist this a refi or a purchase?
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10K Club
Joined: Aug 2002
Posts: 47,673
Bloomington, IN
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Deb, I missed the no existing lien therefore it would not meet the refi definition for HMDA. However, I have seen these type transaction reported as purchases for HMDA.
The ROR applies under the following:
Supplement I, 226.2: Definitions and Rules of Construction (01/01/01)
2(a)(24) Residential mortgage transaction.
5. Acquisition. i. A residential mortgage transaction finances the acquisition of a consumer’s principal dwelling. The term does not include a transaction involving a consumer’s principal dwelling if the consumer had previously purchased and acquired some interest to the dwelling, even though the consumer had not acquired full legal title.
ii. Examples of new transactions involving a previously acquired dwelling include the financing of a balloon payment due under a land sale contract and an extension of credit made to a joint owner of property to buy out the other joint owner’s interest. In these instances, disclosures are not required under §226.18(q) or §226.19(a) (assumability policies and early disclosures for residential mortgage transactions). However, the rescission rules of §§226.15 and 226.23 do apply to these new transactions.
Last edited by dpersfull; 03/24/04 08:16 PM.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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#173176 - 03/24/04 08:44 PM
Re: Ist this a refi or a purchase?
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10K Club
Joined: Jul 2001
Posts: 84,347
Galveston, TX
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But Dan, if I understand the situation, a current owner is not buying out a co-owner. It is a brand new owner that previously had no ownership in the dwelling, however it was their primary residence. I don't think that RofR would apply. Additional thoughts??
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#173179 - 03/24/04 09:01 PM
Re: Ist this a refi or a purchase?
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10K Club
Joined: Aug 2002
Posts: 47,673
Bloomington, IN
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Randy, I based my comment on the following:
My applicant has occupied a modular home since 1995 , as his primary residence. The applicant is the only one who lives in the home, there is, however a co-owner of the home , as shown on the title. The co-owner wants to sell her interest , and thus my customer's request, to purchase the co-owner's interest . The title is currently lien-free
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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#173180 - 03/24/04 09:03 PM
Re: Ist this a refi or a purchase?
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10K Club
Joined: Jul 2001
Posts: 84,347
Galveston, TX
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OK Dan - so that's twice in two days that I can't read - I should go to work for HUD. How do you put up with me??? Thanks for your patience.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#173181 - 03/24/04 09:07 PM
Re: Ist this a refi or a purchase?
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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