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#1746889 - 10/04/12 09:28 PM Home Improvement for a poolon a construction loan
dfumero Offline
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We have a loan secured by land only to build a pool on a primary dwelling that is in the middle of construction. The loan term is 15 years. Is this a HMDA reportable as a Home Improvement loan? The home does not have a 411 address assigned yet. We are not doing the construction loan the customer is currently paying cash he may get a loan later in the process. I can see not to report the loan but I also can see why I should.... I'm seriously confused.

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#1746920 - 10/05/12 12:45 AM Re: Home Improvement for a poolon a construction loan dfumero
Truffle Royale Offline

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nope...not home improvement. If I'm reading this right, construction is not finished so you haven't got a home to improve.

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#1747102 - 10/05/12 04:13 PM Re: Home Improvement for a poolon a construction loan dfumero
Dan Persfull Offline
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There is a dwelling in progress on this property. How do you justify the loan not being a home improvement loan?

If justified not being a home improvement and since the funds are being used for part of the construction of the home and/or improvements to the real property the home is being constructed on would it not be a home purchase?

I personally think you have to classify it as one or the other and I'd be more inclined to classify it as a home purchase.
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#1747205 - 10/05/12 06:38 PM Re: Home Improvement for a poolon a construction loan dfumero
Truffle Royale Offline

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I guess I could have expanded and said I'd leand towards reporting it as a purchase. But I'm confused. The loan is not secured by the dwelling but only by the land so I don't see how that fits into HMDA at this point.

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#1747211 - 10/05/12 06:44 PM Re: Home Improvement for a poolon a construction loan dfumero
Dan Persfull Offline
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How can the loan not be secured by the dwelling that is in the course (middle) of construction? Unless they made this 15 year loan unsecured or secured by some other collateral.
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#1747233 - 10/05/12 07:17 PM Re: Home Improvement for a poolon a construction loan dfumero
Truffle Royale Offline

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The collateral on the loan is just the land? There's no mortgage on the dwelling? I'm not sure, Dan. The only part I was sure of was that it wasn't HI but rather purchase IF ...???

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#1747239 - 10/05/12 07:26 PM Re: Home Improvement for a poolon a construction loan Truffle Royale
dfumero Offline
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The collateral is on another piece of property which is loan only. The loan for the pool will not go to the construction of the dwelling. The only way I would report it is by Home Improvement or I wouldn't report it correct? The home will be finished by the time the pool is build.

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#1747253 - 10/05/12 07:46 PM Re: Home Improvement for a poolon a construction loan dfumero
Dan Persfull Offline
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The collateral is on another piece of property which is loan only.

That would have been very helpful information in the original question for us to be able to give you an accurate answer. Some of us assumed the loan was secured by the land the home is being built on.


TR:

The collateral on the loan is just the land? There's no mortgage on the dwelling?

Every mortgage I have ever seen includes existing and future improvements. The loan, if secured by the property the home is being constructed on, would automatically be secured by the dwelling by virtue of the mortgage.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1747293 - 10/05/12 08:50 PM Re: Home Improvement for a poolon a construction loan dfumero
Truffle Royale Offline

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THAT makes sense, Dan. I'll have to reread a mortgage to find where this is.

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#1747311 - 10/05/12 09:24 PM Re: Home Improvement for a poolon a construction loan Dan Persfull
dfumero Offline
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First of sorry I wasn't clear on my original question. I thought I had mentioned it.

Answering your questons
The collateral on the loan is just the land? Correct, the land is in different town then where the dwelling is being built.

There's no mortgage on the dwelling? We are not handling the construction loan. The borrower is currently paying the builder cash for the advance as of today.

There maybe no mortgage on the dwelling.

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#1747562 - 10/09/12 02:58 PM Re: Home Improvement for a poolon a construction loan dfumero
dfumero Offline
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After some research on HMDA getting it right. I'm concluding it's not reportable. I think the key element is "home improvement by the institution". Since there no existing dwelling at the time the loan funded then we will not identify as a home improvement. I'm I on the right track. I'm hoping we only have one of these types of loans so at least I can meet the be consistent rule.


Home Improvement loan is (a) any dwelling -secured loan to be used, at lease in part, for repairing, rehabilitatinf, remodeling, or improving a dwelling, (or the real property on which the dwelling is located) or (b) any loan not secured by a lien on a dwelling to be usedm at least in part, for one ot more of those purposes that is classified as a home improvement loan by the institution.

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