Skip to content
BOL Conferences
Thread Options
#1481220 - 12/15/10 08:29 PM Does this meet the definition of Refinance?
manimal Offline
Diamond Poster
manimal
Joined: Feb 2008
Posts: 2,207
Deleted
We had several loans to a business customer that were all cross-collateralized with business assets and a single-family home. One of these loans was a LOC for 500,000. The entire loan relationship was just restructured. As part of this restructuring, the majority of the balance on the LOC was converted into a new term loan. Same cross-collateralization (BA and SFH).

Normally I would say yes, this is HMDA-reportable as a refinance. However, the LOC wasn't reduced--the loan officer kept the LOC at 500,000. So I am not sure if this new term loan actually satisfies and replaces the LOC. It seems to satisfy/replace the balance on the LOC, but is that enough to trigger reporting?

Now I am confused as to how to prove one way or the other. Thoughts? Thanks!
_________________________
We're all here 'cause we've lost control.

Innerpartysystem

Return to Top
HMDA

   
HMDA Academy
#1481254 - 12/15/10 09:01 PM Re: Does this meet the definition of Refinance? manimal
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
The obligation, not the balance, has to be satisfied and replaced by a new obligation. Based on the information you provided the LOC was not satisfied and replaced therefore it would not meet the definition of a refinancing.

If any of the other loans that were secured by the dwelling were satisfied and replaced by this new loan then it would meet the definition.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#1483425 - 12/21/10 04:30 PM Re: Does this meet the definition of Refinance? Dan Persfull
manimal Offline
Diamond Poster
manimal
Joined: Feb 2008
Posts: 2,207
Deleted
Thank you so much for your insight, Dan! It is sounding to me like this is not a "refinance" as defined in HMDA.
_________________________
We're all here 'cause we've lost control.

Innerpartysystem

Return to Top

Moderator:  SMQ, CRCM