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#1445925 - 09/21/10 05:02 PM HMDA?? ROR??
Bec Offline
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I have a processor who is taking three mortgage secured by a primary residence and essentially combining them into one mortgage (not satisfying the old mortgages. The note that she is "rolling" the other two in will have the same term and the interest rate will be less. There is no new money. I have no idea what to classify this mortgage as. Is it a renewal and therefore not HMDA reportable and requires no ROR, or is this a refinance? Please help me.....
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#1445986 - 09/21/10 06:01 PM Re: HMDA?? ROR?? Bec
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I don't think I understand. How can you take 3 separate mortgages and combine into one without at least satisfying two of the notes?

If they are all with your bank (have to be based on what you are saying) wtih no new money, then you don't have ROR. As far as HMDA, again...how can you not be satisfying at least 2 of the notes?
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#1445988 - 09/21/10 06:03 PM Re: HMDA?? ROR?? Bec
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Is she taking 3 notes and combining them into 1? In that case, you would have a HMDA refinance as you would be "satisfying and replacing" 3 dwelling-secured notes with one new dwelling-secured note. That sounds like what you described. If you are only modifying and extending an existing note, then not HMDA reportable. If no new money, then i would say no ROR--you aren't increasing the debt secured by the home. Just my opinion.
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#1445989 - 09/21/10 06:04 PM Re: HMDA?? ROR?? raitchjay
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The term used was satisfying the "mortgages"....confused me too at first. Maybe they don't release mortgages until all mortages are paid off?
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#1445995 - 09/21/10 06:09 PM Re: HMDA?? ROR?? raitchjay
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Yes, I apologize, I am not really sure how to say it and be clear. Essentially she is taking 2 existing notes and combining them with a third existing note, she is filing a new mortgage for this as well. She is not satisfying the existing mortgages but is instead leaving them out there until the whole deal is paid off.

All of these notes use the primary dwelling as collateral.
Last edited by Bec; 09/21/10 06:10 PM.
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#1445996 - 09/21/10 06:09 PM Re: HMDA?? ROR?? raitchjay
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ah. Could be. Although rereading it seems the terms are possibly being interchanged...one part mentions the mortages and another part mentions the one note the other "mortgages" are being rolled in to.
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#1445998 - 09/21/10 06:11 PM Re: HMDA?? ROR?? RR Joker
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But two notes are being satisfied in the process...correct?

I think this is closer to a refi than a renewal due to the other 2 notes, but we would never process something like that, so I'm going to bow out and defer to those that routinely do renewals!
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#1446001 - 09/21/10 06:13 PM Re: HMDA?? ROR?? RR Joker
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If no new note is being produced by this transaction, then i don't think you can have a refinancing. You say she is taking 2 existing notes and "combining" them with a third "existing" note. That part sounds like a modification to me. I don't see how you could have a refinancing unless a brand new note is being produced.
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#1446002 - 09/21/10 06:14 PM Re: HMDA?? ROR?? RR Joker
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If by satisfy you mean they will no longer exist...then yes. But the mortgages will be left "hanging out there" and will show up if a title report is done.

My hang up is exactly that, refi...or renewal.

SO this is something that is normally not done huh???
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#1446005 - 09/21/10 06:17 PM Re: HMDA?? ROR?? Bec
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The mortgages have no relevance to it being a HMDA refinance. Whether a dwelling-secured NOTE (or NOTES) are being replaced with a new dwelling-secured NOTE is what matters. My take on what you are saying is that your bank doesn't release old mortgages until ALL existing mortgages with your bank on the property are satisifed. I'm just saying that's not the relevant part for your HMDA question...does that help?
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#1446013 - 09/21/10 06:21 PM Re: HMDA?? ROR?? raitchjay
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If your dwelling-secured note is being replaced (and not just modified) by a new dwelling-secured note, the fact that the mortgage is not released doesn't have a bearing on it being HMDA reportable. (In my opinion anyway.)
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#1446014 - 09/21/10 06:21 PM Re: HMDA?? ROR?? Bec
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yeah, you could probably classify this as a modification...again something we just don't do on consumer loans!
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#1446024 - 09/21/10 06:24 PM Re: HMDA?? ROR?? RR Joker
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It doesn't sound like a modification to me....i think they are truly replacing the note, just not releasing the mortgage. At least, that's what it sounds like to me. Bec's last post clarified to me, i think, that a new note is being produced and not just being modified.
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#1446053 - 09/21/10 06:42 PM Re: HMDA?? ROR?? raitchjay
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I didn't see that/those post(s)...it does sound like all 3 notes are being replaced with a new note, therefore it's a refinance. the mortgages don't mean beans. (as raitch said)
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#1446112 - 09/21/10 07:24 PM Re: HMDA?? ROR?? raitchjay
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Yes that does help.
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#1446114 - 09/21/10 07:26 PM Re: HMDA?? ROR?? Bec
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OK so if it is a new note, which I believe it is after you clarified it very well to me...it would be considered HMDA. But what about ROR?
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#1446127 - 09/21/10 07:38 PM Re: HMDA?? ROR?? Bec
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No ROR if no new money, assuming all of the notes that are being rolled into one are with your bank and not another financial institution.
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#1446142 - 09/21/10 07:49 PM Re: HMDA?? ROR?? raitchjay
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That is correct, they are all with our bank and so is the subsequent new note.

Let me throw this out there for a hypothetical: Say this transaction was being done because the customer is no longer in a "good financial place" and so we are doing this to "help" him out. would this apply as I read it in Reg Z definition of a refinance in that this would not be considered a refinance if:

" A change in the payment schedule or a change in collateral requirements as a result of the consumer's default or delinquency, unless the rate is increased, or the new amount financed exceeds the unpaid balance plus earned finance charge and premiums for continuation of insurance of the types described in Sec. 226.4(d)."

In this scenario, only the rate is changed (lowered) the payments remain the same but it is sort of a work out loan. So would it still be considered a refinance?
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#1446155 - 09/21/10 08:07 PM Re: HMDA?? ROR?? Bec
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Your initial question was in regards to HMDA....it would not matter for HMDA purposes. Again...if you were only modifying an existing note, then no, not HMDA reportable. The question comes down again to: are you satisfying and replacing an existing dwelling-secured note with a new dwelling-secured note? In your previous posts, that is what it sounded like. Or......are you merely modifying an existing note?

Reg Z has no bearing on HMDA (Reg C).
Last edited by raitchjay; 09/21/10 08:08 PM.
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#1446160 - 09/21/10 08:12 PM Re: HMDA?? ROR?? raitchjay
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What would be the main difference between a modification and a satisfaction of a note? I feel so incompetent

Gotchya that Reg Z and Reg C are two different things, thank you for that clarification. It is hard to not apply one to the other though I know you have to be so careful, words matter in compliance.
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#1446167 - 09/21/10 08:17 PM Re: HMDA?? ROR?? Bec
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Are you producing a new promissory note? Or will the customer merely be signing a modification agreement?
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#1446174 - 09/21/10 08:25 PM Re: HMDA?? ROR?? raitchjay
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A new promissory note has been produced.
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#1446182 - 09/21/10 08:29 PM Re: HMDA?? ROR?? Bec
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Then IMO you have a HMDA reportable refinancing. There may be workout loan things that you have to consider as well on this loan from a Reg Z perspective, and having no experience with that particular issue, i would not muddy the waters for you by trying to say anything about that.
Last edited by raitchjay; 09/21/10 08:29 PM.
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#1446456 - 09/22/10 02:33 PM Re: HMDA?? ROR?? raitchjay
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Bec, it does appear from what you've indicated that your loan may fall under the "workout" exemption in Z.
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#1451211 - 10/04/10 03:43 PM Re: HMDA?? ROR?? RR Joker
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I think we lost our "workout" exemption in that we are going to cash out $9,000 to pay off taxes.
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