Husband & wife are getting divorced & house is on the market to be sold. We made a 12 month, interest only, loan to them while they try to sell the house.

Both husband & wife have moved out & already purchased other homes.

Is this considered a bridge loan for HMDA? Or, is it not a bridge loan because husband & wife have both already purchased other homes?

Thanks.

Don't know about the others, but we would not consider this a bridge loan and would report it. It is not a "bridge" loan to other permanent financing. It seems as only a short-term loan to me.

I'm still struggling with this question. I've had a consultant indicate that this is temporary financing. I'm not yet convinced either way yet.

Other thoughts?

Thanks.

How is this loan to be repaid? If it's to be repaid by the sale of the home then I also consider it short-term, not temporary. Temporary means the loan is to be replaced by a permanent loan, which it doesn't sound like from what you described.

Loan repayment is from sale of the house.

Then ask your consultant how that is 'temporary'? There will be no other loan.

It is hard to say and I guess it depends on what they needed the funds for... if they used the funds to purchase their new homes then I would say it is a bridge loan because the loan will be repaid by the sale of the asset, however, if not then I would consider it a short term loan.

For HMDA does it matter? This is not a purchase, not a refi and not a home improvement loan. It is just a short term loan apparently for the purpose of expenses of carry the old home.

I thought it was a refinance to interest only since both individuals had purchased new residences. I guess I was 'reading between the lines'.

Sorry for the confusion.

With our loan proceeds, we paid off another loan secured by this house that's for sale (a refinance).

Since the borrowers had already purchased other homes & weren't using the loan proceeds to purchase a new house, I can't determine if it qualifies as a bridge loan (& exempt from HMDA reporting) or if it's short term & reportable. I typically think of a bridge loan as temporary financing to bridge the gap between the sale of the old house & purchase of the new house. In this case, they already bought the other house(s).

Reportable or not reportable?

Thanks.

This is a short term refinancing. It's not a bridge loan because it has nothing to do with the purchase of another property. It's not temporary financing because it is not structured to be repaid by longer term financing.

Thank you.