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#185500 - 04/29/04 07:58 PM Line of Credit & HMDA
Anonymous
Unregistered

I have a commercial Line of Credit secured by a second mortgage on the borrower's primary residence. This Line of Credit replaces a loan with another bank (I've not gotten ahold of the Loan Officer to find out what the loan being replaced was for). Do I even need to track down the officer? Are all Lines of Credit the same, i.e. not reportable?

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Lending Compliance
#185501 - 04/29/04 08:12 PM Re: Line of Credit & HMDA
GreatBlue Offline
Diamond Poster
GreatBlue
Joined: Feb 2003
Posts: 2,362
Colorado
This has been the subject of some debate. Most contributors to the debate believe that all lines of credit are optional under HMDA. That is my stance.

Others believe only HELOCs as defined by Reg. Z are optional, and that any business purpose line of credit, such as the one you're dealing with would have to be reported.

You might try a search of the threads for "HMDA" and "line of credit" to see the various arguments.
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#185502 - 04/30/04 06:43 AM Re: Line of Credit & HMDA
Princess Romeo Offline

Power Poster
Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
Does anyone dare send the question to the HMDA Help Line?
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Regulations are a poor substitute for ethics.
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#185503 - 04/30/04 09:39 PM Re: Line of Credit & HMDA
CRAatBOK Offline

Power Poster
Joined: Mar 2004
Posts: 6,172
Further South than I wanna be.
Quote:

This has been the subject of some debate. Most contributors to the debate believe that all lines of credit are optional under HMDA. That is my stance.

Others believe only HELOCs as defined by Reg. Z are optional, and that any business purpose line of credit, such as the one you're dealing with would have to be reported.

You might try a search of the threads for "HMDA" and "line of credit" to see the various arguments.




I guess I am one of those that believes it is not the ame as a HELOC because Reg Z applies to consumer purpose loans and a commercial line of credit is not a consumer loan so it is not under Reg Z.
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Life is not the way it's supposed to be. It's the way it is. The way you cope with it is what makes the difference.

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#185504 - 04/30/04 10:03 PM Re: Line of Credit & HMDA
Tillie Offline
Gold Star
Tillie
Joined: Apr 2003
Posts: 266
I went to FFIEC website in faq's for Refinancing - line of credit. It says it is not required to be reported. Anyway, that's the way I read it & I'm stickin' to it!

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#185505 - 04/30/04 10:03 PM Re: Line of Credit & HMDA
Anonymous
Unregistered

I went the HMDA help route back in January. It went like this:

My question to HMDA Help :

Would you please clarify:

We opt not to report home equity lines of credit. Does this option only include the consumer product by that name, or also include business lines of credit?

Second, does it make any difference if they are open end or closed end business lines of credit?

The first response :

All products that are considered lines of credit are optional reporting for HMDA. However, if you report any lines of credit, you must report all lines of credit.
Open end lines of credit are optional for reporting under HMDA. Closed end loan applications are required to be reported under HMDA.

Thank you for using HMDAHELP.

Due to the reference to closed end loans, I countered with:

Regarding open end versus closed end credit lines, we offer the typical open end line that can be advanced, paid down and advanced again which is clearly optional reporting under HMDA. The closed end lines are basically draw loans, where the disbursements can not be readvanced. The maximum loan amount can be reached only once. But they are still written as business lines of credit. They are NOT fully disbursed at closing like a typical closed end loan. Are those optional for reporting?

The next response was :

Thank you for the details. A closed-end line of credit would be HMDA-reportable assuming that it meets HMDA guidelines (HMDA purpose definitions).

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