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#2014375 - 05/15/15 04:12 PM refinance, plus working capital
newyork Offline
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When a loan is made to refinance a dwelling, and it includes extra monies for working capital, is this HMDA refinance reportable even if the full loan is not entirely for that purpose?

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#2014380 - 05/15/15 04:20 PM Re: refinance, plus working capital newyork
raitchjay Offline
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Joined: Oct 2009
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OK
So long as your borrower is the same and the loan being paid off and the current loan are both secured by a dwelling, it's reportable. Any cash out in addition to the refinancing is only relevant if it is used for a home purchase or home improvement. There's no business purpose exemption in HMDA.
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#2014393 - 05/15/15 04:54 PM Re: refinance, plus working capital raitchjay
Adam F Offline
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Adam F
Joined: Apr 2013
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VA
Originally Posted By raitchjay
There's no business purpose exemption in HMDA.


If I had a dollar for ever time I have had to correct a Loan Officer on this, then I would be a very wealthy man.
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#2014412 - 05/15/15 05:35 PM Re: refinance, plus working capital raitchjay
RR Becca Offline
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RR Becca
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Posts: 5,249
out of the frying pan...
Originally Posted By raitchjay
So long as your borrower is the same and the loan being paid off and the current loan are both secured by a dwelling, it's reportable. Any cash out in addition to the refinancing is only relevant if it is used for a home purchase or home improvement. There's no business purpose exemption in HMDA.


Just tagging on - there's also no "majority of proceeds" test for HMDA. If your new loan is a $100,000 refinance with cash out and you are paying off a $100 existing lien but using the rest to finance a tiddlywinks team, the loan is still a refinance as far as HMDA is concerned.
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#2014414 - 05/15/15 05:37 PM Re: refinance, plus working capital newyork
raitchjay Offline
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Posts: 9,105
OK
laugh Good point.
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