Home Equity Loans, Property Purchases, and HMDA -- PCi

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Home Equity Loans, Property Purchases, and HMDA
Answer by Todd Cooper, PCi

Question: If a customer has a loan with one loan number attached to it but within this loan he is buying and selling homes with the money he borrowed do we have to do a HMDA on each property, or just on the original loan?

Answer: If the borrower is using a residential piece of real estate to secure the loan, and they are using that credit to purchase other pieces of residential real estate, then it is considered a home equity loan; and if the institution is reporting home equity loans, then they should report the loan in question as a single originated loan.

If the loan is a commercial loan secured by residential real estate, then the loan is not reportable under either HMDA or CRA.

If the loan is a commercial loan not secured by residential real estate, and it falls within the other reporting guidelines, it should be reported under CRA.

PCi Corporation is the leading provider of compliance risk management solutions that ensure financial institutions fully comply with the Community Reinvestment Act (CRA), the Home Mortgage Disclosure Act (HMDA), fair lending and anti-predatory laws, as well as the National Flood Insurance Reform Act. More than 90 of the nation's top 100 banks, numerous community banks, and many of the federal and state regulatory and enforcement agencies rely on the company's compliance products, data, and services. More information about PCi can be found at www.pciwiz.com.

Todd Cooper
EVP, CRA Products
PCi Corporation
617 535-3000

First published on BankersOnline.com 8/18/03

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