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#1508096 - 02/10/11 05:24 PM Refinance of dwelling on 25+ acres
azbanker Offline
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Help...would we report a refinance of a dwelling on 680 acres. It is not "farmland". Does the farmland exemption include anything over 25 acres (as in Respa)? And does the exemption only apply to home purchase loans?

Thank you in advance for ANY help!!

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#1508144 - 02/10/11 06:10 PM Re: Refinance of dwelling on 25+ acres azbanker
raitchjay Offline
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HMDA only gives an agricultural exemption for purchases. Refinances are not exempt. There is a difference of opinion on whether you can simply use the 25 acre exemption on purchases or whether you have to actually discern an agricultural purpose, so i'd say be consistent.
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#1508241 - 02/10/11 07:41 PM Re: Refinance of dwelling on 25+ acres raitchjay
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Thanks!

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#1590275 - 08/10/11 06:30 PM Re: Refinance of dwelling on 25+ acres azbanker
3up3down Offline
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What if the customer is refinancing his primary residence to purchase 84 acres of farmland?

Thanks

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#1590321 - 08/10/11 07:12 PM Re: Refinance of dwelling on 25+ acres 3up3down
raitchjay Offline
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Reportable as a refinance. (On the flip side, if they owned the home free and clear and were using it as collateral for a loan to purchase the 84 acres of farmland, that would be exempt as an ag. purchase.) I don't read the ag. loan exemption as pre-empting the definition of a reportable refinancing.
Last edited by raitchjay; 08/10/11 07:14 PM.
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#1590420 - 08/10/11 08:38 PM Re: Refinance of dwelling on 25+ acres raitchjay
Dodge Offline
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We have a situation were the borrower purchased a dwelling and 40 acres. The lender coded the loan as agricultural because the borrower will use the 40 acreas for his cows. However, he plans to resale the dwelling. The loan is set up as a single pay for seven months. We are considering this as short term financing because the borrower does not intend to place this on permanent financing. He is confident the dwelling will sell within the seven month time frame.

Will this be consider a agri loan and exempt from HMDA because it was a purchased. Or, will it be consider a home purchase non owner occupied.

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#1590552 - 08/11/11 01:00 PM Re: Refinance of dwelling on 25+ acres Dodge
Dan Persfull Offline
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Page D-5 of the GIR:

A loan to purchase property used primarily for agricultural purposes is not a home purchase loan even if the property includes a dwelling.

Ooops hit the submit button too early.

If the house is separate from the 40 acres then I would have to opine the purchase of the house would not be exempt as it was not part of the agricultural purchase but was an investment purchase.

Last edited by Dan Persfull; 08/11/11 01:04 PM.
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#1590917 - 08/11/11 07:47 PM Re: Refinance of dwelling on 25+ acres Dan Persfull
bOaty Offline
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How about:

Refi of AG land that has a mobile home on it. The write up states that no value was given to MH as it was designated personal property.

Would you report this as a refi?

Also as an aside, this meets the definition of and appears on the call report as a small farm loan. crazy
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#1590918 - 08/11/11 07:52 PM Re: Refinance of dwelling on 25+ acres bOaty
Dan Persfull Offline
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A MH meets the definition of a dwelling. See Reg C 203.2(d),

The term includes an individual condominium unit, cooperative unit, or mobile or manufactured home.
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#1590936 - 08/11/11 08:06 PM Re: Refinance of dwelling on 25+ acres Dan Persfull
bOaty Offline
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It's the no value given to it that is throwing me off, along with the small farm issue. I'm concerned about double reporting too.

It certainly does meet the definition though.

Thank you Dan.
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#1590980 - 08/11/11 08:39 PM Re: Refinance of dwelling on 25+ acres bOaty
RR Becca Offline
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out of the frying pan...
if you took the title, you'll have a hard time defening it as "no value given" regardless of what the write-up says.

ETA: it would be similar to abundance of caution - everything but appraisal still applies. smirk
Last edited by RR Becca; 08/11/11 08:40 PM.
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#1590990 - 08/11/11 08:44 PM Re: Refinance of dwelling on 25+ acres RR Becca
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Thanks Becca.

After digging a little deeper I see that it is a draw down line of credit. We haven't had one of these in a long time but thought that we would repor it. Having said that, I can't seem to find anything that says that draw down lines of credit are reportable.

I just found soemthing that indicates that closed end lines of credit are reportable.
Last edited by bOatn Shasta; 08/11/11 08:49 PM.
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#1590997 - 08/11/11 08:49 PM Re: Refinance of dwelling on 25+ acres bOaty
Dan Persfull Offline
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Bloomington, IN
A draw note is closed end credit, only open-end credit is optional reporting.
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#1592607 - 08/16/11 08:28 PM Re: Refinance of dwelling on 25+ acres Dan Persfull
Glo Offline
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I have one here that is provide funds for the purchase of 140 acres and a dwelling from the customer's nephew. It is secured by the land and dwelling. The term is a 20 year amortization with a 5 year balloon. It is coded at a 1C2A. There is a HMDA sheet in the file and now I am being asked if this is even reportable. Can you help, please?

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#1592627 - 08/16/11 08:42 PM Re: Refinance of dwelling on 25+ acres Glo
raitchjay Offline
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Here, i would exempt it as an ag. purchase simply based on the acreage. I believe Dan and others would say you need to document an actual agricultural purpose in order to exempt. If you have both, over 25 acres and a documented ag. purpose, then without question, it would be exempt. Here's the wording: "A loan to purchase property used primarily for agricultural purposes is not a home purchase loan, even if the property includes a dwelling. Any reasonable standard may be used to determine the primary use of the property, such as by reference to the exemption in the Real Estate Settlement Procedures Act (RESPA) for a loan on property of 25 acres or more. The institution may select the standard to apply on a case-by-case basis."
Last edited by raitchjay; 08/16/11 08:43 PM. Reason: forgot to close my quote
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#1592653 - 08/16/11 09:02 PM Re: Refinance of dwelling on 25+ acres raitchjay
Glo Offline
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Okay, thank you for your help!

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#1624722 - 11/04/11 06:55 PM Re: Refinance of dwelling on 25+ acres raitchjay
Still Smiling Offline
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Originally Posted By: raitchjay
Here, i would exempt it as an ag. purchase simply based on the acreage. I believe Dan and others would say you need to document an actual agricultural purpose in order to exempt. If you have both, over 25 acres and a documented ag. purpose, then without question, it would be exempt. Here's the wording: "A loan to purchase property used primarily for agricultural purposes is not a home purchase loan, even if the property includes a dwelling. Any reasonable standard may be used to determine the primary use of the property, such as by reference to the exemption in the Real Estate Settlement Procedures Act (RESPA) for a loan on property of 25 acres or more. The institution may select the standard to apply on a case-by-case basis."


Would this same rule apply if it were a refinance rather than a purchase?
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#1624734 - 11/04/11 06:59 PM Re: Refinance of dwelling on 25+ acres Still Smiling
raitchjay Offline
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No. The ag. exemption is for purchases only. There is no ag. exemption for refinances.
Last edited by raitchjay; 11/04/11 07:13 PM. Reason: state 3rd sentence more accurately
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#1624789 - 11/04/11 07:50 PM Re: Refinance of dwelling on 25+ acres raitchjay
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Thanks raitchjay. I thought this was the case.
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