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#1871591 - 11/15/13 04:11 PM Temporary Financing Question
danaken Offline
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Joined: Mar 2011
Posts: 88
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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?

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#1872178 - 11/18/13 07:03 PM Re: Temporary Financing Question danaken
MMontjoy01 Offline
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MMontjoy01
Joined: Apr 2008
Posts: 47
NC, USA
Are you considering it temporary because of the term of the loan?

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#1872522 - 11/19/13 06:20 PM Re: Temporary Financing Question danaken
danaken Offline
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Joined: Mar 2011
Posts: 88
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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.

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#1872525 - 11/19/13 06:24 PM Re: Temporary Financing Question danaken
raitchjay Offline
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Joined: Oct 2009
Posts: 8,721
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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.
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#1873664 - 11/22/13 05:12 PM Re: Temporary Financing Question raitchjay
Slugbug Offline
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Posts: 195
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?

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#1873707 - 11/22/13 06:01 PM Re: Temporary Financing Question danaken
raitchjay Offline
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Joined: Oct 2009
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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.
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#1873777 - 11/22/13 07:38 PM Re: Temporary Financing Question danaken
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,762
Bloomington, IN
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
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The opinions expressed are mine and they are not to be taken as legal advice.

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