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#2075542 - 04/25/16 07:04 PM Modifications
George Offline
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Joined: Apr 2016
Posts: 364
Two questions in one day, can someone say Rookie!

I have a loan here that is initially unsecured to pay for medical expenses. Now, the loan was modified to add new money for home improvement, but still unsecured. I was under the impression that modifications were not reportable, but then I read about some New York rule; which would make the new money for the improvements reportable. Can anyone clarify please?

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#2075545 - 04/25/16 07:09 PM Re: Modifications George
George Offline
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Joined: Apr 2016
Posts: 364
Little more information on the loan:

- Original loan October 2015
- Modification February 2016
- Maturity on Loan January 2017 (worksheet just says until loan paid off, no date given).

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#2075672 - 04/26/16 03:15 PM Re: Modifications George
George Offline
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Anybody????

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#2075675 - 04/26/16 03:23 PM Re: Modifications George
MScarn6942 Offline
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Joined: Aug 2015
Posts: 756
Land Lacking in Lakes, IL
It probably depends on how you do your modifications. For something like this, we usually just do a new note here, so that would make it HMDA reportable. But if you do it differently, then I'd be inclined to say no. It is probably worth an email to HMDAHelp@FRB.gov.
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#2075700 - 04/26/16 04:36 PM Re: Modifications George
George Offline
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Posts: 364
I agree, a new loan would be simpler. But now how much fun would that be! Thank you WSB, I appreciate it!

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#2076337 - 04/29/16 02:21 PM Re: Modifications George
George Offline
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Joined: Apr 2016
Posts: 364
Anybody know, generally, how long it takes for HMDA Help to respond to an email? It has been a few days, so I am just wondering if I need to send a follow up email.

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#2076342 - 04/29/16 02:48 PM Re: Modifications George
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
I've had them take days at a minimum and weeks at a maximum. I've also sent reminders to them after a week or two.

Bottom line: Don't hold your breath.
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David Dickinson
http://www.bankerscompliance.com

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#2076886 - 05/04/16 01:18 PM Re: Modifications George
George Offline
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Joined: Apr 2016
Posts: 364
Just in case anybody is wondering, here is the response I received from HMDAHelp yesterday (5/3/2016):

"Modifications, extensions, consolidation agreements, and renewals are not HMDA reportable.

Modifications are always exempt from HMDA reporting as refinancing. However, when a modification to a loan extends new money for home purchase or home improvement the loan is HMDA reportable. The modification of this loan is similar as it switches the loan to permanent financing which makes it reportable as a home purchase/home improvement, and not a refinance."

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#2076935 - 05/04/16 03:13 PM Re: Modifications George
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
I agree. Let me put it in place English:

NEVER report modifications/extensions/renewals, but there's always an exception. IF you set up 2 phase financing for a temporary/perm loan and when you get to the phase 2 and decide to modify it (instead of replacing it with a new note), you need to report the modification as a "purchase" for HMDA. IOW, they closed the loophole that prevented these from being reported.
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David Dickinson
http://www.bankerscompliance.com

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