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#1667933 - 02/21/12 08:52 PM HMDA Purchaser Code
KatieL Offline
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KatieL
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Hello,
We have a loan that is guaranteed by the SBA (7a), and in addition we sold a 75% participation to a broker-dealer investment firm.
Would we report as Purchase code 5 - Private Securitization? Your thoughts are appreciated smile

From the HMDA FAQ, which is another language to me and I don't quite understand:
Type of Purchaser - Private securitization. When should code 5 for "private securitization" be used?

Answer: Code '5' is to be used for securitizations by purchasers other than by one of the government-sponsored enterprises identified in codes '1' through '4'. If an institution selling a loan knows or reasonably believes that the loan will be securitized by the institution purchasing the loan, then the seller should use code '5' for "private securitization" regardless of the type or affiliation of the purchasing institution. Reasonable belief or knowledge could, for example, be based on the purchase agreement or other related documents, the institution's previous transactions with the purchaser, or the purchaser's role as a securitizer (such as an investment bank). If an institution selling a loan does not know whether the purchaser will securitize the loan, and, the seller knows that the purchaser frequently holds or disposes of loans by means other than securitization, then the seller should use one of codes '6' through '9', depending on the nature of the purchaser.
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#1668975 - 02/23/12 05:55 PM Re: HMDA Purchaser Code KatieL
KatieL Offline
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-anyone have any thoughts on this?
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#1668984 - 02/23/12 05:49 PM Re: HMDA Purchaser Code KatieL
Kathleen O. Blanchard Offline

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I would not consider this a securitization. You sold a participation, you did not securitize the loan. You can check the type of entity you sold to here:

http://www.ffiec.gov/nicpubweb/nicweb/SearchForm.aspx
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#1668991 - 02/23/12 06:09 PM Re: HMDA Purchaser Code Kathleen O. Blanchard
KatieL Offline
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Thanks KB, much appreciated!
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#1670453 - 02/28/12 02:49 PM Re: HMDA Purchaser Code Kathleen O. Blanchard
raitchjay Offline
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OK
Originally Posted By: Kathleen B
I would not consider this a securitization. You sold a participation, you did not securitize the loan. You can check the type of entity you sold to here:

http://www.ffiec.gov/nicpubweb/nicweb/SearchForm.aspx



How does this tool work exactly? I put in the information for my investor and get "domestic entity--other"; the definition of "domestic entity--other" is given as "Domestic institutions that engage in banking activities usually in connection with the business of banking in the United States"......so does that correspond to a "6"?
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#1670462 - 02/28/12 02:45 PM Re: HMDA Purchaser Code KatieL
Kathleen O. Blanchard Offline

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Search on the name of the entity you are dealing with, then when you get the result, select organizational heirarchy and select parent. You can then see that your entity is a bank sub, not a bank. Actually their website (because you told me who they are) tells you they are a bank sub mortgage lender. They are a 7.

If they were a department/division of a bank they would be a 6.
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#1670464 - 02/28/12 03:00 PM Re: HMDA Purchaser Code KatieL
raitchjay Offline
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OK
Thanks Kathleen. I'm still highly confused by that site, so i may ask this again when i have a new investor laugh.
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#1670465 - 02/28/12 02:48 PM Re: HMDA Purchaser Code KatieL
Kathleen O. Blanchard Offline

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Anytime! I posted back in the PM but of course the posts are in a crazy order.
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#1670467 - 02/28/12 03:03 PM Re: HMDA Purchaser Code KatieL
raitchjay Offline
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OK
Thank you as always.
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#1787445 - 02/19/13 11:40 PM Re: HMDA Purchaser Code KatieL
Mrs. Rizzo Offline
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Curled up by the fire...
I chose to respond to this particular thread because it's already been explained about the NIC website and how to determine the purchaser code using it.
However, I'm curious how you go about searches for entities that show no results. We've had them as 9's, but I'd really like to get some feedback.

Thank you in advance for your time!
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#1787446 - 02/19/13 11:42 PM Re: HMDA Purchaser Code KatieL
Kathleen O. Blanchard Offline

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Like what entity?
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#1787449 - 02/19/13 11:46 PM Re: HMDA Purchaser Code KatieL
Truffle Royale Offline

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give us a name, Mrs. Rizzo, and we'll try to help.
I really don't like the site much either but it was the one the FRB used to 'educate' us on where to check purchaser codes so I use it.

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#1787462 - 02/20/13 12:25 AM Re: HMDA Purchaser Code KatieL
Mrs. Rizzo Offline
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Curled up by the fire...
How about Franklin American Mortgage Company?

Also, I searched for Affiliated Mortgage Company and it's there, but want to make sure I understand correctly.
The search showed Domestic Entity Other. I did the heirarchy by parent and I read that to mean Benchmark Bank is the parent. So, purchaser code would be 6?
Last edited by Mrs. Rizzo; 02/20/13 12:33 AM.
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#1787465 - 02/20/13 02:00 AM Re: HMDA Purchaser Code KatieL
Kathleen O. Blanchard Offline

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Franklin american is a 7.

A mortgage company that is a bank sub, not a department of the bank, is a 7. Only the bank is a 6. Just had this debate with a bank. They asked their sales repmand he said 6. I insisted on seeing the contract etc to see who was purchasing, the bank or the non-bank sub. Lo and behold, it was the non-bank sub and the purchasers guide said "for HMDA, code sales to us as a 7".
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#1788054 - 02/21/13 06:19 PM Re: HMDA Purchaser Code KatieL
Mrs. Rizzo Offline
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Curled up by the fire...
How do you determine about FAMC being a 7? How they are licensed?
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#1788093 - 02/21/13 07:03 PM Re: HMDA Purchaser Code KatieL
Kathleen O. Blanchard Offline

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I placed FAMC as a 7 because the definition for 7 is:

Code 7—Life insurance company, credit union, mortgage bank, or finance company

The separate mortgage lending companies that are subs of banks or in bank holding companies are state licensed are reported as 7s.

Franklin American is state licensed and is a mortgage "bank". From their website:

"Founded in 1993, Franklin American Mortgage Company (FAMC), a privately-held mortgage banking firm located in Franklin, Tennessee, is a full-service professional mortgage banker licensed to provide residential mortgages across the nation. FAMC, which offers a host of diverse, flexible mortgage packages for customers with a variety of backgrounds and needs, is committed to helping families and individuals achieve the dream of home ownership through its three divisions: retail, wholesale and correspondent. "


License Info:

https://www.franklinamerican.com/ext/general?npage=disclaimer

Based upon all of that I code that type of non-depository banking company as 7 (domestic entity other) [which is what the bank or bank holding company subs are listed as in the NIC] and have never been cited as being wrong by any of the regulatory agencies. Some of the non-depository mortgage companies that are part of bank holding companies state to code them as 7s in their purchaser guides.
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#1788109 - 02/21/13 07:16 PM Re: HMDA Purchaser Code KatieL
Mrs. Rizzo Offline
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Curled up by the fire...
I agree with you. Needed to validate my thoughts.
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#1788242 - 02/22/13 12:20 AM Re: HMDA Purchaser Code KatieL
ComplyinAZ Offline
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Arizona
Thank you this helped me as well.
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