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#1704683 - 05/30/12 07:17 PM Home Improvement Loan paying off Home Depot?
Multiple Hats Offline
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Joined: Jul 2008
Posts: 204
Would a loan to pay off Lowe's and Home Depot Credit Cards be a HMDA Home Improvement Reportable Loan? I thought the loan proceeds had to be used for the purpose of Home Improvement. If that's the case then this wouldn't be a Home Improvement loan for HMDA because the home improvements are already done and the proceeds are going to the credit card companies.

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#1704688 - 05/30/12 07:22 PM Re: Home Improvement Loan paying off Home Depot? Multiple Hats
Dan Persfull Online
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Dan Persfull
Joined: Aug 2002
Posts: 46,834
Bloomington, IN
Your thought process is correct. The proceeds of this loan are not to do home improvements but to payoff an outstanding loan that previously financed the home improvements.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#1704709 - 05/30/12 07:31 PM Re: Home Improvement Loan paying off Home Depot? Dan Persfull
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Thank You.

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#1707523 - 06/06/12 06:42 PM Re: Home Improvement Loan paying off Home Depot? Multiple Hats
3up3down Offline
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Joined: Jun 2008
Posts: 25
I have a similar situation where our customer refinanced their home and the funds that were disbursed were to pay off credit cards and other loans. No money was disbursed directly to contractors or for supplies. However, the loan officer wrote on the bottom of the application that they were doing home improvement and would know the loan amount when the the remodel was finished.

Since home improvement is indicated on the application by the loan officer, should the purpose be home improvement or refinance?

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#1707578 - 06/06/12 07:35 PM Re: Home Improvement Loan paying off Home Depot? Multiple Hats
hmdagal Offline
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hmdagal
Joined: Dec 2002
Posts: 3,818
Were all of the home improvements being financed by the credit cards, which were in turn going to be paid by your loan? If so, and a mortgage loan was also going to be paid off with the new loan, it would be reportable as a refinance.

If any of the money was going to pay for improvements directly, it would be coded as home improvement.

If the money was strictly paying off credit cards (no lien payoffs and nothing directly for improvements), the loan would not be reportable.

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