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#1984178 - 12/18/14 07:17 PM Reportability of Mobile Home Park purchases...
Help! Compliance Offline
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We have more than one loan to purchase a mobile home park. I have read other posts with answers stating that such purchases are HMDA reportable, reported as a purchase of multiple 1-4 family dwellings. If only a few homes are community owned and the majority of the property contains pads that are rented out to those with mobile homes (1 loan actually has storage units for rent as well), is the loan still HMDA reportable based on the use of 10-25% of the purchase? I tried to consider the purchase as mixed use and leaned towards it being CRA reportable, because of most of the purchase being for commercial purposes; however, our compliance officer believes it is still entirely HMDA reportable, and the mixed use test cannot be used in this case, because such a test is for a single structure only. Any thoughts/incite?

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#1984272 - 12/18/14 09:58 PM Re: Reportability of Mobile Home Park purchases... Help! Compliance
CompBanker0613 Offline
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We had a borrower "Jane Doe" who purchased a mobile home park. She was additionally going to occupy one of the trailers. We elected not to report for HMDA using this line of thinking.. yes, she was going to live in one of the trailers, but the primary purpose of the loan is commercial purposes, she was purchasing this mobile home park as a business venture, not a place to live. We don't have a lot of these types of transactions, but the few we've had in the past several years we've gone back to "mixed-use" and the commercial purpose of the loan. I know this gets said a lot, but pick a way and just make sure you are consistent with the application.
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#1984276 - 12/18/14 10:02 PM Re: Reportability of Mobile Home Park purchases... Help! Compliance
raitchjay Offline
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Originally Posted By: pp1865
We have more than one loan to purchase a mobile home park. I have read other posts with answers stating that such purchases are HMDA reportable, reported as a purchase of multiple 1-4 family dwellings. If only a few homes are community owned and the majority of the property contains pads that are rented out to those with mobile homes (1 loan actually has storage units for rent as well), is the loan still HMDA reportable based on the use of 10-25% of the purchase? I tried to consider the purchase as mixed use and leaned towards it being CRA reportable, because of most of the purchase being for commercial purposes; however, our compliance officer believes it is still entirely HMDA reportable, and the mixed use test cannot be used in this case, because such a test is for a single structure only. Any thoughts/incite?


I agree with your compliance officer--the mixed-use test is for mixed-use within one structure. You can't say a loan isn't for the purchase of a dwelling or dwellings when the individual structures themselves are only being used as: DWELLINGS. The fact that many if not most of the dwellings are being rented changes nothing IMHO. The only thing that i could see that could get you out of HMDA reporting would be your collateral: if you don't have a security interest in the mobile homes, but only the land, then that would be a different story.

There is no business/commercial purpose exemption in HMDA. There's a mixed-use test to determine whether a structure is a dwelling or not. That's it.
Last edited by raitchjay; 12/18/14 10:08 PM.
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#1984323 - 12/19/14 01:35 PM Re: Reportability of Mobile Home Park purchases... Help! Compliance
RR Becca Offline
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out of the frying pan...
I agree with raitchjay.
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#1984355 - 12/19/14 02:43 PM Re: Reportability of Mobile Home Park purchases... Help! Compliance
Dan Persfull Offline
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she was purchasing this mobile home park as a business venture, not a place to live.

Then why did she occupy one of the MHs being purchased as her primary residence?
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#1984612 - 12/22/14 05:30 PM Re: Reportability of Mobile Home Park purchases... Help! Compliance
Princess Romeo Offline

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The mix-use test is for a "property" and not confined to a structure. the Commentary merely gives one "example" of a mix-use property. Read all of the words in the Commentary:

Quote:
4. Mixed-use property. A loan to improve property used for residential and commercial purposes (for example, a building containing apartment units and retail space) is a home improvement loan if the loan proceeds are used primarily to improve the residential portion of the property. If the loan proceeds are used to improve the entire property (for example, to replace the heating system), the loan is a home improvement loan if the property itself is primarily residential. An institution may use any reasonable standard to determine the primary use of the property, such as by square footage or by the income generated. An institution may select the standard to apply on a case-by-case basis. If the loan is unsecured, to report the loan as a home improvement loan the institution must also have classified it as such.


You need to be careful because I have witnessed banks that got dinged for reporting loans that the examiner deemed NOT reportable. Your best bet may be to send an e-mail to HMDA HELP and keep a copy of their response with your HMDA records.
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#1984639 - 12/22/14 06:32 PM Re: Reportability of Mobile Home Park purchases... Help! Compliance
raitchjay Offline
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So you'd exempt a loan to purchase what might be hundreds of dwellings?
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#1984684 - 12/22/14 07:25 PM Re: Reportability of Mobile Home Park purchases... raitchjay
Dan Persfull Offline
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See this thread for a response from HMDA Help I posted. As I said I don't totally agree with their response but I have accepted it and use the "mixed-use" property test on a case by case basis.

In the above scenario was she buying her personal residence or was she buying a business? Without the benefit of having the loan documentation of her intent we don't know. But if you want to use the mixed use test then I would say it's the FI's call whether to report it or not.
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#1984688 - 12/22/14 07:29 PM Re: Reportability of Mobile Home Park purchases... raitchjay
Dan Persfull Offline
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Originally Posted By: raitchjay
So you'd exempt a loan to purchase what might be hundreds of dwellings?


If they were buying 100 rental dweliings what part of the mixed use test would you use to exempt the loan as a home purchase?
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#1984695 - 12/22/14 07:36 PM Re: Reportability of Mobile Home Park purchases... Help! Compliance
raitchjay Offline
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That's my point Dan.
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#1984701 - 12/22/14 07:54 PM Re: Reportability of Mobile Home Park purchases... Help! Compliance
Dan Persfull Offline
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Well that was kind of my point also.

If they are buying the MH park and with that purchase they are also buying 25 MHs as rental property and 50 additional MH pads to rent then I'm not sure what part of the mixed use test would exempt the purchase as a home purchase.

They are buying the MH park to rent the pads to MH owners. They are also purchasing MHs to be placed, or remain on a number of the pads to rent. So where is the mixed-use test that exempts the purchases of the MHs.

To me this is not a mixed use property but a mixed purpose loan. One purpose is to buy the MH park (pads) as a business venture, the other purpose to purchase MHs to rent. A loan to purchase a dwelling secured by a dwelling is a home purchase regardless of any other purpose that additional proceeds may be used for.

The only possible way that I might consider this to be mixed use property is if the titles to the MHs have been retired and the MHs are now part of the real estate. But if titles still exist for the MHs then you will not convince me this is mixed use property.
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#1984703 - 12/22/14 07:57 PM Re: Reportability of Mobile Home Park purchases... Help! Compliance
raitchjay Offline
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Dan, my question was directed towards PR. To my way of thinking, mixed-use doesn't apply to this situation.
Last edited by raitchjay; 12/22/14 07:57 PM.
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#1984762 - 12/23/14 12:17 AM Re: Reportability of Mobile Home Park purchases... Help! Compliance
Princess Romeo Offline

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If she is buying a mobile home PARK that mainly consists of pads upon which individually owned mobile homes sit - then she is not buying "hundreds of dwellings". She is buying a lot consisting of cement and dirt and one dwelling (presumably the unit in which she will live.) The majority use of the property is to rent out the pads.

Most Mobile Home Parks do not own the individual mobile home dwellings - they own the pads and charge the unit owner rent that allows the mobile home to sit on that pad and hook up to the utilities.

I used to be at a bank that financed mobile home parks and we did not report those loans on the HMDA LAR precisely because the park consisted of the cement pads and a clubhouse. Interestingly enough, we also did separate loans on the mobile home unit that served as the dwelling for the park manager. The loan was to the corporation that owned the park, so our HMDA LAR showed a non-owner occupied dwelling with N/A for the GMI.
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#1984772 - 12/23/14 01:18 PM Re: Reportability of Mobile Home Park purchases... Help! Compliance
RR Becca Offline
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out of the frying pan...
Originally Posted By: pp1865
If only a few homes are community owned and the majority of the property contains pads that are rented out to those with mobile homes


This sentence makes it sound like the loan is to purchase the park, pads, and a number of individual homes. Even if there are more pads than homes I would have a hard time seeing how this isn't purchase of dwellings secured by dwellings.
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