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#1747764 - 10/09/12 07:22 PM Is this short term or a bridge loan?
donnac Offline
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Joined: Feb 2003
Posts: 624
Borrower is refinancing primary residence from another bank. Borrower has the house up for sale and our loan term is 12 months, interest only, with the anticipated repayment source being the sale of the house. Borrower has not purchased another house & is living in the house until it sells.

1. Is this a bridge loan since the borrower isn't buying another house? (I've been taught that a bridge loan is the gap financing betweent he purchase of a home & the sale of another home.)
2. Is this short term & HMDA reportable since the anticipated repayment source is the sale of the house?
3. The loan officer considered this temporary financing for HPML purposes and didn't calculate the rate spread. Is this correct? When I calculate for HPML purposes, it is 1.54% & our policy is not to make HPML loans.

Thanks.

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#1747769 - 10/09/12 07:26 PM Re: Is this short term or a bridge loan? donnac
Tater Offline
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Joined: Jan 2006
Posts: 619
Missouri
"A refinancing is any dwelling-secured loan that replaces and satisfies another dwelling-secured loan to the same borrower" Pg 29 of GIR.

Temporary financing exclusion does not apply to refinancings, only purchase/improvement.

I believe you are OK on the HPML exclusion (though I would watch that policy for UDAP or UDAAP violations, depending on your regulator). I'm not 100% on that part, though.
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#1747913 - 10/10/12 01:33 PM Re: Is this short term or a bridge loan? donnac
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,464
Bloomington, IN
1. No.

2. Yes.

3. This is not a temporary or bridge loan. It's short term financing therefore it is not exempt from HPML requirements.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1747926 - 10/10/12 02:00 PM Re: Is this short term or a bridge loan? Dan Persfull
donnac Offline
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Joined: Feb 2003
Posts: 624
Thank you for your help.

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