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#137130 - 12/07/03 09:52 PM Unsecured Home Improvement Loans
Anonymous
Unregistered

I am preparing for training and have several questions please:
1.Do we report unsecured home improvement loans?
2.If an existing unsecured home improvement loan at another bank is being paid off do we (can we) report that as a home improvement? (Here I'm thinking about example two in the FFIEC's website. I know it would not be a refi., but thought it could be a home improvement.)
3.When HMDA refers to classifying a loan for home improvement purposes is there a specific line item on the call report for home improvement loans?

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General Discussion
#137131 - 12/08/03 03:07 PM Re: Unsecured Home Improvement Loans
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
1. Only if you classify them as "home improvement" loans.

2. I don't think you can. This is a refinancing, but it doesn't meet the definition in HMDA (both must be dwelling secured).

3. I'll let someone else answer this one.

This is why I've been encouraging bankers to not report unsecured (or non-dwelling secured) HI loans as HMDA anymore. If you only report dwelling secured HI loans, there is a consistent purpose and collateral test for all types of HMDA loans: home purchase, HI and refinancings all must be dwelling secured.

If you don't go with this: if you are going to report non-dwelling secured HI loans, then you have a problem with the "logic" (I know, I know, I shouldn't mention logic and HMDA in the same sentence). If you report a CD secured HI loan, when it refinances, you can't report it again.
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David Dickinson
http://www.bankerscompliance.com

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#137132 - 12/09/03 01:56 PM Re: Unsecured Home Improvement Loans
KYAuditor Offline
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KYAuditor
Joined: Jan 2003
Posts: 138
Kentucky
3. Loans are reported on the call report by call class code which refers to the collateral securing the loan.
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Just my 2 cents worth--for what its worth!!

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#137133 - 12/09/03 08:14 PM Re: Unsecured Home Improvement Loans
bean Offline
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Joined: Mar 2002
Posts: 225
Dave:

I just want to make sure I am reading your response correctly.
For #2 your response indicates that both loans have to be dwelling secured. I thought that is the new definition not the old for 2003?
Am I not interpreting your response correctly?

Thanks

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#137134 - 12/09/03 08:48 PM Re: Unsecured Home Improvement Loans
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
The refinancing of an unsecured HI loan into another unsecured loan is not reprotable unless there are new funds advanced for HI.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#137135 - 12/10/03 04:28 AM Re: Unsecured Home Improvement Loans
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Quote:

Dave:

I just want to make sure I am reading your response correctly.
For #2 your response indicates that both loans have to be dwelling secured. I thought that is the new definition not the old for 2003?
Am I not interpreting your response correctly?

Thanks


Yes, I'm giving you the 2004 rules. I assumed you were doing training on the new rules. Why would you be doing training on the 2003 rules?
_________________________
David Dickinson
http://www.bankerscompliance.com

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#137136 - 12/10/03 01:59 PM Re: Unsecured Home Improvement Loans
Anonymous
Unregistered

Let's beat this home improvement horse to death......I've read where some banks are choosing not to report unsecured HI loans because it will be less confusing at refinance time since they would have to be dwelling secured to be reported again. Are those banks also NOT going to report HI loans that are secured for say a CD for the same reason? (they would be reported the first time (assuming they are classified as HI), but not at refi time because they also are not dwelling secured). Or putting it another way, are the banks saying THEY WILL ONLY REPORT DWELLING-SECURED HI LOANS after 1-1-04?????

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#137137 - 12/10/03 03:42 PM Re: Unsecured Home Improvement Loans
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Quote:

Let's beat this home improvement horse to death......I've read where some banks are choosing not to report unsecured HI loans because it will be less confusing at refinance time since they would have to be dwelling secured to be reported again. Are those banks also NOT going to report HI loans that are secured for say a CD for the same reason? (they would be reported the first time (assuming they are classified as HI), but not at refi time because they also are not dwelling secured). Or putting it another way, are the banks saying THEY WILL ONLY REPORT DWELLING-SECURED HI LOANS after 1-1-04?????


Yes, that's exactly right. See my first post above. If you adopt this method, you will always have a collateral test and purpose test for HMDA.
_________________________
David Dickinson
http://www.bankerscompliance.com

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#137138 - 12/10/03 04:42 PM Re: Unsecured Home Improvement Loans
Anonymous
Unregistered

Thank you DD ...you are the best (ok, ok, one of the best........)

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