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#1660039 - 02/02/12 08:36 PM multi-purpose and multiple properties
Island Dreaming Offline
100 Club
Joined: May 2009
Posts: 231
midwest
Here's the scenario:
The purchase loan of a rental property, an unsecured consumer loan and the construction cost overruns of a primary residence are all being refinanced into one longer term amortized note. Collateral is a 1st lien on the rental property and a 2nd lien on the primary residence.

Here's the question:
Should this be reported as a purchase due to the permanent financing of the construction costs, similar to the GIR guides description of taking a 2nd lien for the downpayment is classified as a purchase?
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#1660049 - 02/02/12 08:48 PM Re: multi-purpose and multiple properties Island Dreaming
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Were the cost overruns for the initial construction of the dwelling or for renovations to the dwelling?


Initial Construction - Conversion of a construction loan for the initial construction of the dwelling is reported as a home purchase.


Renovations - report as a refinancing.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1660052 - 02/02/12 08:52 PM Re: multi-purpose and multiple properties Island Dreaming
Island Dreaming Offline
100 Club
Joined: May 2009
Posts: 231
midwest
They were for the initial construction of the dwelling.

Thank you Dan - it's nice to know I was on the right track on this one!
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