Thread Options
#2027441 - 07/16/15 02:14 PM Purpose vs. Collateral
Linkpars Offline
100 Club
Joined: Jan 2007
Posts: 179
Kentucky
I have a loan that is marked as a refinance, but the funds are going to purchase land only. Since a purchase trumps a refinance would this not be listed on the lar? Also, this is for a denial, but I wouldn't think it would matter either way, approved or not.

Return to Top
HMDA

   
HMDA Academy
#2027443 - 07/16/15 02:18 PM Re: Purpose vs. Collateral Linkpars
NSF, CRCM Offline
Gold Star
NSF, CRCM
Joined: Apr 2013
Posts: 410
VA
See the definitions of purchase and refinance:

A home purchase loan is any loan secured by and made for the purpose of purchasing a dwelling.

A refinancing is any dwelling-secured loan that replaces and satisfies another dwelling-secured loan to the same borrower. For reporting purposes, both the existing obligation and the new obligation must be secured by liens on dwellings.
Last edited by NSFW; 07/16/15 02:21 PM. Reason: Misread post
_________________________
It is better to act cautiously beforehand than to suffer afterward.

The answers I give are my opinions. Not legal advice.

Return to Top
#2027444 - 07/16/15 02:19 PM Re: Purpose vs. Collateral Linkpars
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
Does the loan meet the definition of a refi for HMDA?

Do you have the same borrowers, and both the loan being paid off and the new loan are secured by residential real estate?
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

Return to Top
#2027445 - 07/16/15 02:21 PM Re: Purpose vs. Collateral Linkpars
Linkpars Offline
100 Club
Joined: Jan 2007
Posts: 179
Kentucky
The loan would be refinancing against the home and I guess the equity they have in the house would be used to purchase the land.

Return to Top
#2027448 - 07/16/15 02:25 PM Re: Purpose vs. Collateral Linkpars
NSF, CRCM Offline
Gold Star
NSF, CRCM
Joined: Apr 2013
Posts: 410
VA
Sorry, I misread your post at first.

The purchase would not trump refinance if it was just to purchase land only with no dwelling.

Remember the definition of home purchase for HMDA which I listed in my first post.
_________________________
It is better to act cautiously beforehand than to suffer afterward.

The answers I give are my opinions. Not legal advice.

Return to Top
#2027449 - 07/16/15 02:26 PM Re: Purpose vs. Collateral Linkpars
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
If no loan secured by residential real estate is being paid off, this loan is not a refinance for HMDA; it would be a non-reportable cash out equity loan.

It is not a purchase because land purchases are not reportable for HMDA and it is not a home improvement loan.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

Return to Top

Moderator:  SMQ, CRCM