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#2052911 - 12/07/15 11:07 PM purchase to a refi - refi non-hmda?
Wannaknow Offline
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We were in the middle of processing a purchase transaction for a 2nd home when the borrowers received a 30 day unsecured loan (from our bank) to cover the purchase due to time constraints.

The applicants continued the loan process but as a refinance. we switched gears and reissued disclosures as a refinance and the loan has since funded.

My question is since we are not paying off a dwelling secured loan I don't think the refinance should be HMDA reportable.

Opinions???

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#2052928 - 12/08/15 12:30 PM Re: purchase to a refi - refi non-hmda? Wannaknow
rlcarey Online
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Galveston, TX
First, your new TRID disclosures would be issued as a home equity loan and not a refinance assuming there were changes in the fees and no, the loan would not be HMDA reportable.

These must have been really credit worthy people. I would have immediately filed bankruptcy and discharged the unsecured loan and kept my house. smile
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#2052966 - 12/08/15 02:53 PM Re: purchase to a refi - refi non-hmda? rlcarey
swiggles Offline
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laugh
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#2053193 - 12/08/15 11:43 PM Re: purchase to a refi - refi non-hmda? Wannaknow
Wannaknow Offline
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hmmm...that gives me an idea!!!!

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#2053200 - 12/09/15 12:06 AM Re: purchase to a refi - refi non-hmda? Wannaknow
Darth HMDA, CRCM, CAMS Offline
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Wow... I am shocked they did an unsecured temporary loan - oh my goodness...
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#2053321 - 12/09/15 05:24 PM Re: purchase to a refi - refi non-hmda? Wannaknow
David Dickinson Offline
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Central City, NE
Randy's right that it's not a HMDA reportable loan because it technically doesn't meet the definition of purchase or refinance anymore.

t've seen a few of these before. It's called trust and character based lending. It's something that bureaucracy and regulations have moved us away from. Hmmm.
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#2053473 - 12/10/15 02:59 AM Re: purchase to a refi - refi non-hmda? Wannaknow
Kathleen O. Blanchard Offline

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And risk...get burned, and a bank will think twice about the next time. These types of loans still get made, but not too frequently. Unless a borrower is very liquid, it can be a safety and soundness issue for the bank. What is the backup plan if Plan A falls apart?
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#2053475 - 12/10/15 03:09 AM Re: purchase to a refi - refi non-hmda? Wannaknow
David Dickinson Offline
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Central City, NE
I'm not suggesting it, I'm only pointing out that it's not unheard of - at least in my neck of the woods of small towns & high character people that live in a community they support and would never let a loan go bad. Yep - places like that still exist in Nebraska.
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#2053477 - 12/10/15 04:12 AM Re: purchase to a refi - refi non-hmda? Wannaknow
Kathleen O. Blanchard Offline

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Sometimes it is out of the customer's control..bad things happen to good people. And the bank has a bad loan even when the customer never intended to not be able to pay the bank back. The customer may even one day pay it back, but that could be long after the bank had a write off.
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#2053877 - 12/11/15 09:11 PM Re: purchase to a refi - refi non-hmda? Wannaknow
Dan Persfull Offline
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Bloomington, IN
Also be very careful with that type of loan if rescission is involved. You could very will find yourself in court for circumventing the right to rescind. I believe the precedent case was Gladys Wiggins vs. Avco.
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