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#138154 - 12/10/03 04:50 PM CRA Reportable?
DogLover Offline
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DogLover
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Posts: 146
Sunny Florida
If the purpose of the loan is to finance construction of 5 condo units and the collateral is the land where the condo units are going, is this CRA small business loan reportable?

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#138155 - 12/10/03 05:22 PM Re: CRA Reportable?
Pale Rider Offline
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More info needed:

Is the loan amount less than $1 million, or are the annual revenues of the borrower less than $1 million ? A third question would be: are you reporting this under HMDA as well ? Multifamily lending is the only type that can get us double credit.
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#138156 - 12/10/03 05:51 PM Re: CRA Reportable?
DogLover Offline
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DogLover
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Sunny Florida
Yes, Yes, and that's really my question. Is it HMDA reportable or CRA reportable? You're indicating that we can include it on both registers?

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#138157 - 12/10/03 05:53 PM Re: CRA Reportable?
Skittles Online
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TN
If it's a multi-family dwelling you can. Looks like you're in luck.
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#138158 - 12/10/03 07:20 PM Re: CRA Reportable?
Princess Romeo Offline

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Construction financing is not HMDA reportable. The take-out loans on the condo's are the loans that would be reportable for HMDA.

You cannot report this loan as a Small Business Loan since construction is not reported on the Call Report as a Small Business Loan.

If the loan has a Community Develoment purpose (i.e. the condo's are restricted to low- and moderate-income buyers), then you can report this as part of your aggregate total # and $ of Community Development loans.
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

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#138159 - 12/10/03 10:29 PM Re: CRA Reportable?
Pale Rider Offline
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We typically won't do just a temporary construction loan, we want to do the permanent as well, in this case a mini-perm, so wouldn't a combined construction and mini-perm mulit-family loan be HMDA reportable ? I can feel myself slipping into HMDA H*ll here. No wonder my hair is grey on its way to falling out.
_________________________
Societies that do not find work in and of itself "pleasing to God and requisite to Man," tend to be highly corrupt.


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#138160 - 12/10/03 11:23 PM Re: CRA Reportable?
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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A combined construction/perm/mini-perm would be HMDA reportable if the owner during the construction phase is going to retain ownership and rent the units out. If the owner during construction is going to sell the units upon completion of construction, only the permanent loans to the individual purchasers, which may or may not be with your bank, would be HMDA reportable.
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#138161 - 12/11/03 12:37 AM Re: CRA Reportable?
Princess Romeo Offline

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HMDA reportable except on alternate Tuesdays following the first Monday of a month that follows a month ending in "Y".

The above exception does not apply if the following Thursday occurs during the first quarter phase of the Moon. In those cases, the test to determine if reporting applies should be conducted along a North-South axis while facing in a south easterly direction. If the number of units is more than 4 and is an even number, then reportability will be positive if the borrower's shadow falls on the east of a line drawn along the North-South axis.

If the number of units is more than 4 and an odd number, then the reportability will be positive if the borrower's shadow falls on the west of a line drawn along the North-South axis.

If the number of units is less than 4, then reportability will be positive if a coin with a value greater than one-tenth of one dollar is projected vertically and lands with the face value against the ground.

Bwah-hah-hah!!!!

I'm considering my application to run HUD!!!
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

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#138162 - 12/11/03 03:32 AM Re: CRA Reportable?
Pale Rider Offline
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Bonnie:
You are bad, very bad. I wonder why we haven't heard from the original poster in a while. He or she must think we are nuts, when in actuality, it is the HMDA/CRA regs that are nuts.
_________________________
Societies that do not find work in and of itself "pleasing to God and requisite to Man," tend to be highly corrupt.


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#138163 - 12/11/03 05:57 AM Re: CRA Reportable?
Princess Romeo Offline

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Where the heart is
Hey - I thought my rules actually make more sense.....
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

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#138164 - 12/11/03 12:18 PM Re: CRA Reportable?
Skittles Online
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TN
Bonnie - I love your rules. I actually wish I had them last week when I did my HMDA training. That would have been a great ice breaker.
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#138165 - 12/11/03 01:34 PM Re: CRA Reportable?
sue's mom Offline
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sue's mom
Joined: Feb 2003
Posts: 455
IL
Bonnie,

I thought I had died and gone to Compliance heaven/hell??? your rules seemed to make as much sense as the Feds' rules do. Have a Happy Holiday.

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#138166 - 12/11/03 07:32 PM Re: CRA Reportable?
Anonymous
Unregistered

Hi you guys, it's me the original poster. I've sort of just been waiting to see what all different answers I get. Apparently, I'm going with it's not HMDA or CRA reportable, as it is construction financing. Still a little fuzzy though.

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#138167 - 12/11/03 10:45 PM Re: CRA Reportable?
BeachGirl Offline
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Posts: 206
Myrtle Beach, SC
Thanks Bonnie! I'm going to use this next week in a HMDA training class to break the ice, unless of course, you have it copyrighted?! Makes as much sense as the rules!
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Thanks for all of your help!

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#138168 - 12/11/03 10:49 PM CRA Reportable?
Miss Kitty Offline
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Joined: Mar 2002
Posts: 721
California
With that explanation, you'll fit right in with HUD

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#138169 - 12/11/03 10:54 PM Re: CRA Reportable?
Miss Kitty Offline
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Joined: Mar 2002
Posts: 721
California
Whatdoyoumean?
Is the loan to a contractor or a business? Is the loan over $1 Million?

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#138170 - 12/11/03 11:06 PM Re: CRA Reportable?
Princess Romeo Offline

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Princess Romeo
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Where the heart is
Beachgirl - feel free to use it! I don't believe anything I say here is copywrighted! If it was, I'm sure I'd be making a boatload more money than I am! LOL!
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

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#138171 - 12/11/03 11:12 PM Re: CRA Reportable?
Princess Romeo Offline

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Princess Romeo
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Where the heart is
Quote:

Hi you guys, it's me the original poster. I've sort of just been waiting to see what all different answers I get. Apparently, I'm going with it's not HMDA or CRA reportable, as it is construction financing. Still a little fuzzy though.




Generally speaking, ground-up construction financing is not reportable on either HMDA or CRA. If the construction prjoect does not contain affordable housing for low- mod-income individuals, then you cannot get Community Develoment credit either.

For all intents and purposes, it becomes a non-event in the CRA/HMDA world.

HOWEVER - if you have a loan on an EXISTING dwelling to construct repairs or improvements, then it WOULD be HMDA reportable.

And if the dwelling is for low- mod-income housing, then you would also report it as part of your aggregate number/dollars of Community Development loans.

Just make sure you don't step on any cracks on your way to work that morning....
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

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#138172 - 12/12/03 02:31 PM Re: CRA Reportable?
DogLover Offline
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DogLover
Joined: Aug 2003
Posts: 146
Sunny Florida
Bonnie ~ thanks for your detail.
Cheryle ~ it's a business (XYZ Properties).
I'm still going with not reportable.

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#138173 - 12/12/03 08:47 PM Re: CRA Reportable?
Anonymous
Unregistered

So, what if a builder is purchasing land to build houses and places the land as collateral? In this case, it wouldn't be HMDA or CRA reportable?

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#138174 - 12/12/03 10:37 PM Re: CRA Reportable?
Princess Romeo Offline

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Where the heart is
Vacant Land is not considered a small buiness loan on the Call Report, therefore you cannot report it as a small business loan on the CRA Loan Register.

A land loan is also not HMDA reportable.

If the financing of the vacant land can be considered "Community Development", then you can include the loan in yourm aggregate # & $ of Community Development loans. However, in most cases, that would be a real stretch.

I have a bunch of loans that do not go on the CRA or the HMDA register. Just because a loan was made does not automatically mean you must report it. You need to study the Call Report definitions of "Small Business Loan" for the CRA register, and the HMDA coverage for the HMDA LAR.
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

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#138175 - 12/23/03 04:27 PM Re: CRA Reportable?
Anonymous
Unregistered

I also have a "Is it reportable?" question which I hope isn't a stupid question. If the loan is a small business loan as defined, but the collateral is a blanket lien on A/R and equipment, should this be reported on the CRA register? Other than residential real estate, does collateral matter? (Oops, that's 2 questions) Thank you so much.

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#138176 - 12/23/03 08:05 PM Re: CRA Reportable?
Risa Offline
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Risa
Joined: Sep 2003
Posts: 43
West Coast
Yes, the loan secured by blanket A/R is reportable if it is under one million.

Business purposes loans secured by residential real estate and construction loans are excluded from the definition of small business loan. Bonnie is correct -- you really have to study and understand the call report definitions to get this right.
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#138177 - 12/24/03 12:06 AM Re: CRA Reportable?
HRH Dawnie Offline
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HRH Dawnie
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
Wow I missed a doozy of a question here I am so glad though that I got Bonnie's rules! It all makes sense now!!! You rock girl.

To the last question, both the borrower type and the purpose of the loan are as important as size in determining if a loan is CRA reportable. As Bonnie mentioned, there are a whole slew of loans that are size wise, seemingly CRA reportable, but when purpose and borrower come into play, they get tossed out of the mix and become eligible for only community development (if any) credit.

http://www.ffiec.gov/cra/pdf/cra_guide.pdf

The Call Report instructions are the defining factor, but this publication (check out page 46 on after you read 1-45) discusses when and why a loan is NOT reportable.

And now for 32 seconds of my favorite CRA training program:

Attention: REVENUE SIZE IS NOT A FACTOR IN DETERMINING IF A LOAN IS CRA REPORTABLE (cuz whenever I discuss reportable goober someone asks that question!)
_________________________
Dawn Coursey VP/CRA Queen

CRA Rating is in...Oh who cares...I'm home with the baby.

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#138178 - 12/24/03 02:02 AM Re: CRA Reportable?
Princess Romeo Offline

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Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
Dawnie,

I'll add my own favorite CRA-reportable chant that I must yell at lenders at year-end.

IT DOESN'T MATTER IF THE LOAN IS NOW PAID OFF. IF THE LOAN WAS MADE OR RENEWED THIS YEAR, THEN WE REPORT IT!!!!

***sigh***

This most often happens with loans to businesses located in Moderate Income areas. For some reason, lenders seem to think they don't need to bother with anything once the loan is paid.

Yeah - let's do all this work to make loans in moderate income areas and then LET'S NOT TELL ANYBODY SO WE GET A LOUSY CRA EXAM.

rant...rant....rant....rant....rant....rant...
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

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