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#1821072 - 06/06/13 04:46 PM Commercial Loan - Purch, Refi, or Not Reportable
Kelsey D Offline
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Joined: Aug 2006
Posts: 516
Ohio
The original borrower is ABC Company, which has two outstanding loans with us. These loans are considered troubled debt. The lender has worked out a plan with the borrower. These loans will be discounted creating two new loans to be assumed in a new business name, XYZ LLC. The borrower has obtained another financial backer, is transferring the assets to this new entity, and will dissolve the old entity. The two new loans are cross-collateralized, and thus, secured by a real estate mortgage covering an assisted care facility (not transitory).

Are these new loans HMDA reportable? If so, what is the purpose, refinance or purchase?

Thank you for your time.
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#1821930 - 06/10/13 01:36 PM Re: Commercial Loan - Purch, Refi, or Not Reportable Kelsey D
ComplianceNerd Offline
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Well isn't this an interesting one? smile

In my opinion if you're refinancing a "dwelling" from one borrowers name to another, it's no longer a "refinance" it's a purchase.

I was not under the impression that an assisted living facility was HMDA reportable but if you are considering it to be a dwelling, then I might report this as a 1st & 2nd lien purchase.
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#1821931 - 06/10/13 01:37 PM Re: Commercial Loan - Purch, Refi, or Not Reportable Kelsey D
ComplianceNerd Offline
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That is honestly my opinion and I could be wrong. It's just such an interesting/unusual situation. Good luck!
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#1821935 - 06/10/13 01:40 PM Re: Commercial Loan - Purch, Refi, or Not Reportable ComplianceNerd
JSD Offline
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JSD
Joined: Oct 2000
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USA
Nursing homes, dormitories, sorority/frat houses are considered temporary housing, but Assisted Living and retirement homes are view as dwellings that the individuals reside permanently. The Sept 2000 edition of CRA/HMDA Reporter had a good Q&A section about this topic.

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#1821970 - 06/10/13 03:16 PM Re: Commercial Loan - Purch, Refi, or Not Reportable Kelsey D
ComplianceNerd Offline
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Joined: Nov 2011
Posts: 376
Texas ...
Well, it makes sense... good to know. Thanks
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