If we make a 12 month loan to purchase and rehab a dwelling and know we are going to convert to P&I upon maturity, normally this would be considered temporary for the interim loan. However, at maturity we will most likely renew or modify this note to term out rather than refinance. In this case, should it be reported now since renewals and modifications are not reportable?

Are you considering it temporary because of the term of the loan?

No not because of the term of the loan. If we make a temporary loan that will be replaced by permanent financing, we do not consider these HMDA reportable. The permanent financing would be HMDA reportable. I just happen to have an instance where if we don't report it now, it probably wouldn't ever be reported because when this one matures we will either renew or modify (not HMDA reportable)rather than refinance.

I wouldn't report it. The fact is, your loan is temporary and i see nothing in Reg. C or the GIR that would tell you to go ahead and report a temporary loan because a modification instead of a refinancing will happen down the road.

But if the "intent" of allowing an exemption is because it will eventually be a reportable loan, aren't you getting away from that intent, just because the Reg or GIR doesn't spell it out? The exemption is so those loans don't get reported twice, right?

I didn't write the regulation, so i can't state what the intent is. I attempt to follow what the regulation (and the GIR) actually say, and in this case, it says loans designed to be replaced by financing of a much longer term are exempt from reporting.

If you search the topic you will find several discussions. Here's one to get you started.

http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1572926&page=3