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#1975930 - 11/12/14 10:54 PM Cash out refi for down payment, Refi or purchase?
JC (Darth HMDA) Offline
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JC (Darth HMDA)
Joined: Dec 2013
Posts: 1,399
CA

Hello everyone,

I would appreciate your thoughts on this.

We have a borrower who submitted two loan applications simultaneously. One application was a cash-out refi for which the proceeds would be used as a down payment. The other loan was to purchase the property the down payment was for.

For HMDA reporting purposes, is the cash-out refi a refi or a purchase? The funds are used as part of a purchase, but we are also doing the purchase loan.
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The opinions expressed are mine, do not represent the opinions of my employer, and they are not to be taken as legal advice.

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#1975986 - 11/13/14 02:58 PM Re: Cash out refi for down payment, Refi or purchase? JC (Darth HMDA)
swiggles Offline
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swiggles
Joined: Aug 2001
Posts: 7,351
I would report it as a purchase. Anyone else?
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#1975990 - 11/13/14 03:07 PM Re: Cash out refi for down payment, Refi or purchase? JC (Darth HMDA)
raitchjay Offline
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Joined: Oct 2009
Posts: 9,088
OK
2 loans that together purchase a home is the same IMO as 2 loans that together refinance one, that is, both would be reported as purchases (as both loans that together satisfied and replaced an original dwelling-secured loan would be reported as refinances).
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#1976094 - 11/13/14 04:51 PM Re: Cash out refi for down payment, Refi or purchase? JC (Darth HMDA)
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
I agree this is a purchase. It's a dwelling secured loan to purchase a dwelling.
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http://www.bankerscompliance.com

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#1976513 - 11/14/14 06:27 PM Re: Cash out refi for down payment, Refi or purchase? JC (Darth HMDA)
JC (Darth HMDA) Offline
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JC (Darth HMDA)
Joined: Dec 2013
Posts: 1,399
CA
Thank you all so much for your opnions. Always nice to have confirmations (and some HMDA peace of mind). Thank you!!
_________________________
The opinions expressed are mine, do not represent the opinions of my employer, and they are not to be taken as legal advice.

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#1981430 - 12/05/14 09:33 PM Re: Cash out refi for down payment, Refi or purchase? JC (Darth HMDA)
RSC Offline
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Joined: Aug 2011
Posts: 69
I have the same scenario as CRA/HMDA Guy. But, before the loans closed the customer changed their mind and wants to change the cash out loan from a term loan to a HELOC to be paid when property sells. Do I report the Cash out loan as Approved Not Taken or do not report it at all? We do not report HELOC's.

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#1981462 - 12/05/14 10:30 PM Re: Cash out refi for down payment, Refi or purchase? JC (Darth HMDA)
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
I would treat it as "approved not accepted" (like you say) and then basically treat it like a new request. You don't need to do a new application, but you should have given HELOC disclosures. The date you learned of this was the "action date" for the "not accepted" application.
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#1981465 - 12/05/14 10:43 PM Re: Cash out refi for down payment, Refi or purchase? JC (Darth HMDA)
RSC Offline
Member
Joined: Aug 2011
Posts: 69
Thanks David, I thought that was the case but, I wasn't 100% sure of myself.

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