I understand the confusion. §1002.13(a) states we are to NOT collect GMI collected on home equity, home improvement, etc. (I think we can all agree to that statement). It does say GMI should be collected on purchase loans and the refinancing. What isn't clear is the issue of refinancing of a home equity or home improvement, etc.
Before HMDA changed the definition of refinancing in 2004, this was not something anyone struggled with. I think it was perfectly clear that refinancing always meant "of the purchase money". I've never heard of an examiner that told bankers to collet GMI on a home equity loan that gets refinanced. Our real estate matrix (on the BOL Tools page for years) states to only collect GMI on purchases and the refinancing of purchases. It clearly states not to collect on other loans. No one has ever questioned it and it's being used by lenders and examiners all around the country.
Now that doesn't make me right, but it's a twist on the interpretation that I believe stems back to HMDA. This isn't HMDA. And the definition of refinancing in the new HMDA rules is changing back to the way it was before 2004 (not every refinancing gets reported - like commercial loans that are secured by a dwelling).
Do what you want, but that's my opinion.
KB also says "I agree that not all refinances count for GMI under Reg B. It is really focused on purchases and refis of purchases."