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#155100 - 01/29/04 10:10 PM Need Support
Lu Offline
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Joined: Apr 2002
Posts: 597
Business purpose loan secured by principal dwelling now the business belly up and customers refinance loan again secured by principal dwelling.
This is a consumer loan and HMDA reportable, right?
I can't convince the officer.
Please help me out.
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General Discussion
#155101 - 01/29/04 10:12 PM Re: Need Support
hmdagal Offline
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hmdagal
Joined: Dec 2002
Posts: 3,841
It doesn't matter if it's consumer or business. A loan secured by a dwelling that pays off another loan secured by a dwelling is a refinance for HMDA purposes.

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#155102 - 01/29/04 10:19 PM Re: Need Support
Lu Offline
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Joined: Apr 2002
Posts: 597
They don't want to do disclosures or recission because they say that it is still business.
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#155103 - 01/29/04 10:28 PM Re: Need Support
Pale Rider Offline
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Posts: 34,318
under the Lone Star
The ROR is the easy question, a refinancing by the same creditor is exempt from ROR, except to the extent of any new money. The question of disclosures is difficult because the purpose of the loan matters. Are they refinancing a business loan or is this a loan primarily for personal purposes.
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#155104 - 01/29/04 10:40 PM Re: Need Support
Lu Offline
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Joined: Apr 2002
Posts: 597
That is what we can't agree on. Would it be business purpose if there is no longer a business?
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#155105 - 01/29/04 10:54 PM Re: Need Support
Cowboys Fan Offline
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Joined: Dec 2002
Posts: 4,615
SC
Quote:

It doesn't matter if it's consumer or business. A loan secured by a dwelling that pays off another loan secured by a dwelling is a refinance for HMDA purposes.




Agreed - as long as the new loan and the old loan are to the same borrower.
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#155106 - 01/29/04 11:09 PM Re: Need Support
Anonymous
Unregistered

I had a scenario just yesterday that is identical to your situation. I say that it is definately HMDA reportable, but Reg Z and Respa do not apply.

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#155107 - 01/29/04 11:31 PM Re: Need Support
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
I think classifying it as business purpose is a risky proposition. Sounds like it might now be just personal debt that was incurred through the failed business. If the business is no longer viable - what else could it be?
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#155108 - 01/30/04 03:08 PM Re: Need Support
Lu Offline
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Joined: Apr 2002
Posts: 597
That is what I said. I think that they need to disclose like a consumer loan.
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"If you only laugh and enjoy life when your problems are all solved, you'll never enjoy life."

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#155109 - 01/30/04 03:15 PM Re: Need Support
Anonymous
Unregistered

When in doubt, ALWAYS disclose. It's really not that big a deal and can save a lot of headaches down the road.

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#155110 - 02/01/04 11:32 PM Re: Need Support
Lucy Griffin Offline

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Lucy Griffin
Joined: Nov 2000
Posts: 1,544
I agree with treating it as a consumer loan and disclosing -- especially because these borrowers are in trouble and are likely to be looking for any way out. Your lender should be doing everything possible to protect the bank -- not finding lazy ways to expose the bank to more risk.

Also, the HMDA reportable decision does not have much of anything to do with whether or not the consumer disclosures should be made. Each regulation has its own definitions that set coverage. Reporting or not reporting on the LAR dos not affect TIL coverage.

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