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#1877693 - 12/11/13 04:23 PM Loan Purchase or Not HMDA
BankingNut Offline
Joined: Apr 2010
Posts: 90
I have a loan that I am questioning whether it is HMDA or not. The man dies and leaves his home to his three children. One of the Children lives in the home for lets say one year. Then, he decides he decides he wants to buy the other two siblings out.

I want to say this is not HMDA reportable because our borrower (the tenant) already owned the home and took out a loan to buy full ownership in the home. But I truly don't know.

Any thoughts? Thank you!

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#1877703 - 12/11/13 04:39 PM Re: Loan Purchase or Not HMDA BankingNut
raitchjay Online
Power Poster
Joined: Oct 2009
Posts: 8,773
Interesting question. I would call it a purchase as while the borrower previously owned 1/3 of the home, this loan would be to purchase the other 2/3 and to me, that's still "purchasing" a home. I guess i'd equate it somewhat to a regular 80% purchase loan in a way....the loan by itself didn't buy the home, but combined with the down payment it did; similarly this loan doesn't by itself buy the home, but with the 1/3 interest the borrower already had, it does.
I'm fixin' to fix that.

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#1877712 - 12/11/13 04:47 PM Re: Loan Purchase or Not HMDA BankingNut
hgliii Offline
Platinum Poster
Joined: Mar 2012
Posts: 574
Agree^^^^ I would equate it to a "gift of equity" in a purchase transaction.

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#1877715 - 12/11/13 04:55 PM Re: Loan Purchase or Not HMDA BankingNut
Truffle Royale Offline

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Joined: Jul 2003
Posts: 17,352
I would treat this the same way I treat buyouts of a former spouse's interest.
If there is an existing loan, we call them refinances because the owner is still the owner, their portion of owning has just increased. You'll find a ton of discussion on this in this forum.

If there's no existing loan, I would most likely not report this on my LAR either, BankingNut.

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