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#1878031 - 12/12/13 03:23 PM Home Improvement - Multi Properties
Luz Offline
Junior Member
Joined: Sep 2011
Posts: 47
An application was submitted with a purpose of refinancing a mixed use property. Notes provided by the branch officer, however, indicated that improvements were being made to both the mixed-use property and another residence. The mixed-use property was primarily commercial, so, under normal circumstances the loan would not be HMDA reportable. With the knowledge of the second dwelling and the proposed home improvements, would this loan be HMDA reportable? If so, would we report the dwelling as the subject property (MSA, State...) on the LAR?

Thank you!

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#1878054 - 12/12/13 03:52 PM Re: Home Improvement - Multi Properties Luz
Truffle Royale Offline

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Posts: 17,395
For HI you MUST report the property being improved.
You've got improvements being made to both the collateral and a residence.
But you didn't state whether the improvements on the mixed use will be done to any of the residential or just the commercial part.
If the residential part of the collateral will be improved, I'd report this as HI with the collateral address.

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#1878063 - 12/12/13 04:05 PM Re: Home Improvement - Multi Properties Luz
Luz Offline
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Joined: Sep 2011
Posts: 47
Based on rent rolls the mixed-use property is primarily commercial. Wouldn't that automatically remove it from the equation?

With that said, the improvements to the mixed use property were being made to the commercial space. So, if I understand correctly, in this scenario, we would show the loan as HI for the residence. Correct?

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#1878336 - 12/12/13 11:42 PM Re: Home Improvement - Multi Properties Luz
hmdagal Offline
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hmdagal
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Posts: 3,841
Correct, if you either have a lien against a dwelling
or you classify and report non dwelling secured home improvement loans.

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#1926927 - 05/28/14 01:31 PM Re: Home Improvement - Multi Properties Luz
Compliance504 Offline
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Joined: Dec 2008
Posts: 727
Tennessee
I need to make sure that I've been understanding HMDA correctly on the topic of multi-properties and home improvement....

We have a loan secured by a principal dwelling with the funds going towards home improvements on a second home.....I have understood that you report the location information for the property being improved...in this case we would report the location information for the second home....this is correct, isn't it?

Where I'm getting confused, for some reason, is reporting the lien status in this situation....we have been reporting the lien status of the collateral because there is no lien on the second home being improved......in doing some reading on the threads, I'm doubting if we are doing this correctly.....is it correct to report the lien status of the collateral when you are reporting the location information for the property being improved when there is no lien on the property begin improved?

Thanks for any clarification.....

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#1926934 - 05/28/14 01:47 PM Re: Home Improvement - Multi Properties Luz
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Based on rent rolls the mixed-use property is primarily commercial. Wouldn't that automatically remove it from the equation?

No. If the improvements to the building are primarily to the residential portion then it falls under the HI definition.

See page D-5 of the GIR.


is it correct to report the lien status of the collateral when you are reporting the location information for the property being improved when there is no lien on the property begin improved?

You report the information based on the property being reported on the LAR.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#1926944 - 05/28/14 01:57 PM Re: Home Improvement - Multi Properties Luz
Compliance504 Offline
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Joined: Dec 2008
Posts: 727
Tennessee
Dan....just so I understand what you are saying about reporting the lien status....

In the case of a loan secured by principal residence improving second home with no lien...are you saying that we would report lien status as unsecured? There is no lien on the property being improved....but it is secured by a dwelling.....

I am very confused now....because if it is reported as lien status unsecured....would we have to report it at all...because we don't classify these loans in a way to distinguish them by running a report that they are home improvement loans...

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#1926951 - 05/28/14 02:06 PM Re: Home Improvement - Multi Properties Luz
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
My mistake:

Lien status is not based on the reported property. It is based on whether the loan is dwelling secured.

From the GIR:

Lien Status. For every originated loan, report whether the loan is secured by a first or subordinate lien on a dwelling or is not secured by a dwelling.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#1926958 - 05/28/14 02:12 PM Re: Home Improvement - Multi Properties Luz
Compliance504 Offline
Platinum Poster
Joined: Dec 2008
Posts: 727
Tennessee
Thank you so much for clarifying that for me, Dan, and pointing out to me how to understand what the GIR is saying....THANKS

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