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#19922 - 06/06/02 09:13 PM HMDA
Anonymous
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We have a couple customers who take out a loan for six months, purchase homes, rehab them then sell them and payoff the loan with the sale proceeds. Sometimes they will refinance the six month loan with a longer term loan (180-360 months) to keep the homes as investment (rental) property.

The FDIC put out a bulletin which mentions that a loan is temporary when other financial arrangements are being made to pay the loan. This could be from an asset sale or from another loan.

Would our loan type mentioned here be considered temporary?

I'm thinking it would be. Any input would be great. Thanks

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Lending Compliance
#19923 - 06/06/02 09:37 PM Re: HMDA
Angel Eyes Offline
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Angel Eyes
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#19924 - 06/06/02 10:12 PM Re: HMDA
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,765
Central City, NE
I vote "yes" on your situation. These sound like temporary financing. I would not report these loans on the HMDA LAR.
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David Dickinson
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#19925 - 06/07/02 11:56 AM Re: HMDA
RVFlyboy Offline
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RVFlyboy
Joined: Oct 2000
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Soaring over Georgia
Thanks for the plugs, Jennifer. I agree with David, I'd treat these as temporary financing. I think your position would be defensible with the examiners. If the loan is refinanced to the longer term investment property loans you mentioned, at that point they'd be HMDA reportable.
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#19926 - 06/11/02 09:34 PM Re: HMDA
Anonymous
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Thanks for the input everyone.

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#19927 - 06/11/02 10:53 PM Re: HMDA
Dolly Nugent Offline
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Dolly Nugent
Joined: Nov 2000
Posts: 1,820
Southern California
We have also made these types of loans. I consider them temp financing.
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CRCM
Opinions expressed are my own.

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