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#1783343 - 02/06/13 05:16 PM Two loans to pay off one loan
complyorelse Offline
Gold Star
Joined: Nov 2007
Posts: 442
U.S.
We originated two new loans to a borrower with the purpose of paying off one loan. The old and new loans are secured by a dwelling. The HUD for one of the new loans demonstrates that one loan "paid down" the existing loan and the HUD for the other new loan shows it actually "paid off" the existing loan. Obviously, only one loan could technically pay off the existing loan.

So, we would only report the one new loan that actually paid off the existing loan, correct? Just want to be sure because the intention of providing both loans was to pay off one existing loan. Would appreciate any feedback. Thank you.

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#1783347 - 02/06/13 05:30 PM Re: Two loans to pay off one loan complyorelse
raitchjay Offline
Power Poster
Joined: Oct 2009
Posts: 8,764
OK
I would report both, as both loans together paid the existing loan off. I use the same reasoning i would if you did an 80/20 piggyback purchase...both the 1st and 2nd lien purchase loans would be reportable as purchases, even though neither loan by itself completely purchased the home.
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#1783351 - 02/06/13 05:32 PM Re: Two loans to pay off one loan complyorelse
Bluesfan57 Offline
100 Club
Joined: Feb 2011
Posts: 155
Peak 10 Breck, CO
we report as mentioned above, both new loans reported as refinances

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#1783700 - 02/07/13 04:10 PM Re: Two loans to pay off one loan complyorelse
complyorelse Offline
Gold Star
Joined: Nov 2007
Posts: 442
U.S.
Great. I appreciate the feedback.

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#1784369 - 02/08/13 08:29 PM Re: Two loans to pay off one loan complyorelse
Iszy_theBug Offline
100 Club
Joined: Nov 2006
Posts: 115
I just recently asked a FRB examiner the same question and he said to report both as refinances.

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