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#1844435 - 08/21/13 02:58 PM 5 yr loan for beach house
iluvfrogs Offline
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Joined: May 2010
Posts: 51
We did a five year balloon note for a borrower to construct a beach house. This loan is secured by a condo unit. Doesn't really qualify as a temporary loan-would we report this as a purchase? Which property to report?
thanks.

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#1844516 - 08/21/13 05:12 PM Re: 5 yr loan for beach house iluvfrogs
Truffle Royale Offline

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End loans or combined construction/perm loans are reported as purchases. This is just a construction loan, correct? Then this is a refinance for HMDA.

For purchase and refi, you report the property securing the loan, the condo.
For HI you report the property being improved.

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#1844529 - 08/21/13 05:23 PM Re: 5 yr loan for beach house iluvfrogs
RR Becca Offline
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RR Becca
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out of the frying pan...
TR - would you call this a refi if there's no existing lien being paid off? I would have been trying to decide between purchase and non-reportable (plain old cash-out).
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#1844550 - 08/21/13 06:04 PM Re: 5 yr loan for beach house iluvfrogs
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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This looks like a construction/"mini perm", which would be a purchase....unless the entire construction period is 5 years! That would be unusual.

Assuming the condo unit is residential property, this would be a purchase.

If this is purely construction, the transaction would be non-reportable unless your bank holds to the view that no takeout means it is yours, therefore you by default have the perm.

I will be surprised if this 5 year loan is construction only.
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#1844587 - 08/21/13 06:55 PM Re: 5 yr loan for beach house iluvfrogs
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
I concur with KB.
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#1844598 - 08/21/13 07:03 PM Re: 5 yr loan for beach house iluvfrogs
Truffle Royale Offline

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Blew past the five year construction loan part.
Even if there was a current loan on the condo, if this is a mini-perm as KB suggested, it would be a purchase for HMDA.

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#1844604 - 08/21/13 07:07 PM Re: 5 yr loan for beach house Dan Persfull
iluvfrogs Offline
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Joined: May 2010
Posts: 51
We did a single advance loan with a 5 year term for construction of the beach house. Which property should I report to hmda?

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#1844608 - 08/21/13 07:13 PM Re: 5 yr loan for beach house iluvfrogs
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,951
Bloomington, IN
The one securing the loan.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1844611 - 08/21/13 07:16 PM Re: 5 yr loan for beach house iluvfrogs
RR Becca Offline
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RR Becca
Joined: Sep 2004
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out of the frying pan...
I blew past the construction part - got caught up in collateral different than subject property.

Some days it doesn't pay to get out of bed. crazy
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