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#1801689 - 04/04/13 09:34 PM Cash out home equity to purchase home
Banker Chick Offline
Junior Member
Joined: Jul 2006
Posts: 37
TN
Scenario:
Customer owns home free and clear and the bank does a cash out home equity loan. The purpose of the funds is to purchase another home. The loan is secured by the home equity loan and not the home that is being purchased.

I would think this is HMDA reportable since the proceeds used are to purchase a home. I don't believe that the loan purpose in this case is refinance since it is not replacing/satisfying an existing lien.

Questions:
1.) Should loan purpose be 'home purchase' and the property address used in reporting be the address that is actually securing the loan or the address of the property being purchased?

2.) Using the same scenario above but now assume that the property address being purchased is actually unknown. Does it become not a HMDA reportable loan because it is technically not a refinance and the address of the home being purchased is aslo unknown.

Thanks for your help in advance!!! smile
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#1801690 - 04/04/13 09:38 PM Re: Cash out home equity to purchase home Banker Chick
raitchjay Online
Power Poster
Joined: Oct 2009
Posts: 8,764
OK
1. Yes, loan purpose is home purchase. Report the address for the property taken as security.

2. Still reportable as a home purchase. You can rely on the statement of your borrower(s) as far as the intended use of funds.
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#1801691 - 04/04/13 09:38 PM Re: Cash out home equity to purchase home Banker Chick
TMatt87 Offline
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TMatt87
Joined: May 2011
Posts: 1,933
Idaho
1) HMDA reportable, coded as home purchase and collateral address is used

2) HMDA reportable as a purchase because you can rely on customer's statement of use of funds. Again the collateral address would be used for reporting.
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#1801692 - 04/04/13 09:39 PM Re: Cash out home equity to purchase home Banker Chick
TMatt87 Offline
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TMatt87
Joined: May 2011
Posts: 1,933
Idaho
Raitchjay quicker on the draw mad grin
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#1801712 - 04/04/13 10:56 PM Re: Cash out home equity to purchase home Banker Chick
Banker Chick Offline
Junior Member
Joined: Jul 2006
Posts: 37
TN
Perfect. I really appreciate your help! Thx Raitchjay and Matt
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