From HMDA – “Home equity lines of credit (HELOCs) for home purchase or improvement may be reported at the institution’s option. Report only the amount that is intended for home purchase or home improvement purposes. An institution that reports home equity credit line originations must also report any applications that do not result in an origination”.
We do report HELOC's. What does it mean that we report any application that does not result in an origination - is it only if they are for purchase or improvement or doesn't the loan purpose matter when it is denied?
Also - an originated HELOC for refinancing purposes is never reported - correct.

OOPS - Don't know how I posted here instead of in HMDA - how can I get it moved!!!! Thanks

A moderator will have to move it for you.

If the purpose of the HELOC is not for a HMDA purpose then it is not reported if denied. If it is then it's reported.

If you report HELOCs and it's purpose is for a refinancing you would report it. Under the refinancing rules you would report the full line and not just the amount used for the refinancing.

Thank you so much.

Original question: "Also - an originated HELOC for refinancing purposes is never reported - correct[?]"

Dan's response: "If you report HELOCs and it's purpose is for a refinancing you would report it. Under the refinancing rules you would report the full line and not just the amount used for the refinancing."

I have always thought a HMDA reporter who chooses to report HELOCs would report a HELOC where the purpose is refinancing, i.e., paying off an existing lien on a dwelling, as Dan has stated above in his reply to the original poster. But everywhere in the HMDA Getting it Right Guide, wherever it talks about reporting HELOCs, it says a HELOC for home purchase or home improvement may be reported at the institution's option. There is no reference to a refinancing. So you could read that to mean you do not report a HELOC where the purpose is refinancing (this is what I think the original poster was getting at).

Dan, could you explain your justification for saying, "If you report HELOCs and it's purpose is for a refinancing you would report it"?

The definition of a refinancing is any dwelling secured obligation that satisfies and a replaces an existing dwelling secured obligation to the same borrower.

How would a HELOC for refinancing purposes not meet that definition?

I'm not disagreeing with you about a HELOC that pays off an existing lien being a refinance. I'm trying to understand why, wherever they talk about the optional reporting of HELOCs in the HMDA Getting It Right Guide, they only refer to purchase or home improvement transactions.

The FAQs (FFIEC's Web site)

Refinancing --- line of credit. If a dwelling-secured line of credit satisfies and replaces another dwelling-secured obligation, is the line required to be reported as a "refinancing"?
Answer: No. A dwelling-secured line of credit that satisfies and replaces another dwelling-secured obligation is not required to be reported as a "refinancing," regardless of whether the line is for consumer or business purposes.


This implies, or at least it does to me, that HELOCs for the purpose of a refinancing are not required to be reported even if it meets the definition of a refinancing but are optional reporting.

Well, that sheds some light on the issue. Thank you for pointing out the FAQ.

It is still not clear to me though that if you elect to report HELOCs, that you may report refinancings.

If you are saying if the FI chooses to report HELOCs but those that are for refinancing purpose are still optional then I would disagree.

The Q&A is, IMO, affirming that HELOC refinances are optional reporting the same as HELOCs for home purchases or home improvement.

However when it comes to HELOCs you either report all or none. You don't pick and choose the ones you want to report or not report.

The HMDA Getting It Right Guide says:
"Home equity lines of credit (HELOCs) for home purchase or improvement may be reported at the institution’s option.
Report only the amount that is intended for home purchase or home improvement purposes. An institution that reports home
equity credit line originations must also report any applications that do not result in an origination."

The FAQ you pointed out says:
"Refinancing --- line of credit. If a dwelling-secured line of credit satisfies and replaces another dwelling-secured obligation, is the line required to be reported as a "refinancing"?
Answer: No. A dwelling-secured line of credit that satisfies and replaces another dwelling-secured obligation is not required to be reported as a "refinancing," regardless of whether the line is for consumer or business purposes."

Between those two statements, one could conclude that reporting of HELOCs for home purchase or improvement is optional, but you do not report HELOCs for refinancing.

I guess what I'm really getting at is why in the Guide where it talks about reporting HELOCs does it only refer to home purchase or improvement? Why is there no reference to refinancing?

The Q&A states they are not required to be reported which leads me to conclude they are optional.



I didn't write the guide therefore I don't know.

Not exactly the same scenario, but I'm looking at a loan right now that is a 2nd mtg HE Term refi of a 2nd mtg HELOC. For some reason I always get mixed up on whether a 2nd mtg is reportable. In this case, it is not a refi of purchase money, so should GMI have been collected?

Lien status is not a factor in determining if the loan is reportable. If the loan meets the definition of a home purchase, home improvement or a refinancing it is subject to reporting.

The loan you describe would be a reportable refinancing with the lien status reported as a (2) Secured by a subordinate lien.

Thank you very much Dan

I submitted the following question yesterday to HMDA Help:

"My question pertains to a HMDA reporter who elects to report home equity lines of credit (HELOCs). It is clear to me you report a HELOC for home purchase or home improvement, and you report only the amount that is intended for home purchase or home improvement. What is not clear is the reporting of a HELOC where no proceeds are intended for home purchase or home improvement, but the HELOC replaces and satisfies another dwelling-secured loan (i.e., a refinancing).

I am aware of the following FAQ:

'Refinancing --- line of credit. If a dwelling-secured line of credit satisfies and replaces another dwelling-secured obligation, is the line required to be reported as "refinancing"?

Answer. No. A dwelling-secured line of credit that satisfies and replaces another dwelling-secured obligation is not required to be reported as a "refinancing," regardless of whether the line is for consumer or business purposes.'

If I choose to report HELOCs, am I also required to report HELOCs for refinancing, or should HELOCs for refinancing (where no amounts are intended for home purchase or home improvement) never ever appear on a HMDA LAR?

Here is the response from HMDA Help:

"If it is two open lines of credit replacing each other or a an open line is replacing any other dwelling secured obligation, it would not be HMDA reportable. Only report the HELOC as a refinancing if the line of credit is being replaced by a close ended dwelling secured loan."

Although the response is poorly worded, and acknowledging that HMDA Help does not always provide accurate information, I thought I would share this information. It sure looks to me like you do not ever report a HELOC that pays off a loan secured by a dwelling where no other proceeds are used for home purchase or home improvement.

Also, I consulted with a well-known Washingtion DC law firm, and they agree that you do not report a HELOC that satisfies and replaces another dwelling-secured loan if none of the additional proceeds will be used for home purchase or home improvement.