Thread Options
|
#2070338 - 03/22/16 01:17 PM
HMDA - Temporary Financing
|
Junior Member
Joined: Sep 2015
Posts: 39
|
Loan for a term of 12 months, would that be considered temporary financing for HMDA reporting?
|
Return to Top
|
|
|
|
#2070350 - 03/22/16 01:56 PM
Re: HMDA - Temporary Financing
Love Cruising
|
Power Poster
Joined: Apr 2001
Posts: 4,828
Between the lines
|
A loan is not temporary simply because it is short term. See the link above for more information.
_________________________
NOLA is my Beach!
|
Return to Top
|
|
|
|
#2070997 - 03/25/16 05:22 PM
Re: HMDA - Temporary Financing
Love Cruising
|
Platinum Poster
Joined: Sep 2003
Posts: 729
|
David: What about construction loans by a builder? The builder get the loan to construct a 1-4 family home but there is not permanent financing. The loan will be paid off when the home is sold. Are these reportable as a purchase or it is exempt as a construction loan?
|
Return to Top
|
|
|
|
#2071199 - 03/28/16 05:32 PM
Re: HMDA - Temporary Financing
Love Cruising
|
10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
|
Construction only loans are exempt regardless how they will be paid off.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
|
Return to Top
|
|
|
|
#2071715 - 03/30/16 08:40 PM
Re: HMDA - Temporary Financing
Love Cruising
|
Platinum Poster
Joined: Sep 2003
Posts: 729
|
I read the following from somewhere so I thought construction loans would only be exempt if they are paid off with a permanent loan somewhere:
A loan with a term of more than 2 years would ordinarily not be considered temporary financing. However, a loan with a term of two years or less is NOT automatically temporary financing. You must look to the expected source of repayment of the loan to determine whether the loan is temporary financing. If the expected source of repayment for the loan is another loan (either from us or from another lender), and the term of the loan is two years or less, the loan is temporary financing. If, however, the expected source of repayment is some other type of source (such as sale of the property or other asset or regular income), the loan will be HMDA reportable, even if the term of the loan is less than 2 years.
|
Return to Top
|
|
|
|
#2071725 - 03/30/16 08:51 PM
Re: HMDA - Temporary Financing
Love Cruising
|
Gold Star
Joined: Apr 2013
Posts: 420
VA
|
From 1003.2:
5. Construction and permanent financing. A home purchase loan includes both a combined construction/permanent loan and the permanent financing that replaces a construction-only loan. It does not include a construction-only loan, which is considered “temporary financing†under Regulation C and is not reported.
_________________________
It is better to act cautiously beforehand than to suffer afterward.
The answers I give are my opinions. Not legal advice.
|
Return to Top
|
|
|
|
#2071731 - 03/30/16 08:59 PM
Re: HMDA - Temporary Financing
Love Cruising
|
10K Club
Joined: Nov 2000
Posts: 18,762
Central City, NE
|
Showgirl: That sounds like an internal policy and someone's opinion. It's not the regulation. §1003.4(d) states: Excluded data. A financial institution shall not report: (3) Temporary financing (such as bridge or construction loans);I read that as a command. SHALL NOT report and then construction is given as an example. There's no If's, and'd or but's in the regulation about this. If you go to our website, you'll find an article called "HMDA Temporary Financing" in the Free Resources section: http://www.bankerscompliance.com/compliance-resources/free-downloads.htmI think this will be helpful to you.
|
Return to Top
|
|
|
|
#2071813 - 03/31/16 03:04 PM
Re: HMDA - Temporary Financing
Snowgirl
|
Power Poster
Joined: Apr 2005
Posts: 3,663
TN
|
I read the following from somewhere so I thought construction loans would only be exempt if they are paid off with a permanent loan somewhere:
A loan with a term of more than 2 years would ordinarily not be considered temporary financing. However, a loan with a term of two years or less is NOT automatically temporary financing. You must look to the expected source of repayment of the loan to determine whether the loan is temporary financing. If the expected source of repayment for the loan is another loan (either from us or from another lender), and the term of the loan is two years or less, the loan is temporary financing. If, however, the expected source of repayment is some other type of source (such as sale of the property or other asset or regular income), the loan will be HMDA reportable, even if the term of the loan is less than 2 years. I've seen this before too! It's on an old tool on BOL. https://www.bankersonline.com/sites/default/files/tools/HMDAChart1.PDFThat being said, this ^^ explanation is what I use for the short term loans and "splash and dash" loans my staff try to call temporary just because the loan term is short in nature. As pointed out above, construction loans are pretty much specifically exempt from HMDA reporting as temporary financing. And that's because construction-only loans are designed/intended/assumed to be replaced by something permanent.
_________________________
I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.
|
Return to Top
|
|
|
|
#2075069 - 04/21/16 05:49 PM
Re: HMDA - Temporary Financing
Love Cruising
|
Platinum Poster
Joined: Sep 2003
Posts: 729
|
Dani: Yes that is the document where I read it. Obviously this must be outdated.
|
Return to Top
|
|
|
|
#2076249 - 04/28/16 08:29 PM
Re: HMDA - Temporary Financing
Love Cruising
|
10K Club
Joined: Nov 2000
Posts: 18,762
Central City, NE
|
Classic example of regulations running amok and not contributing one iota of positive impact for fair lending, safe and sound banking, consumer protection, or any other myriad of reasons we have regulations. Exactly! We all know there are good and bad examiners just like there are good and bad bankers. I hope the examiners that read this will all agree that this is wrong and if you can't agree, please tell us why.
|
Return to Top
|
|
|
|
|
|