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#2077642 - 05/09/16 04:24 PM HI or Refi
George Offline
Gold Star
Joined: Apr 2016
Posts: 364
Borrower is refinancing existing loan, PLUS cash out for reimbursement for costs of improvements. Home Improvement or Refinance?

I am leaning towards Home Improvement.

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#2077645 - 05/09/16 04:48 PM Re: HI or Refi George
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,839
Bloomington, IN
Refinance. None of the loan proceeds are being used for HI.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2077811 - 05/10/16 02:26 PM Re: HI or Refi George
JobSecurity Offline
Platinum Poster
Joined: Oct 2009
Posts: 579
We have a similar situation. Commercial multi-family was purchased and not reported because it was temporary (secured by building). Now we are doing what was supposed to be HI but turns out a complete demo so now classified as a construction loan (still secured by building until dozers get to it). Will be interest only then converting to P&I. Is this a refinance? I am getting hung up on the fact it was never reported.

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#2077852 - 05/10/16 04:28 PM Re: HI or Refi Dan Persfull
George Offline
Gold Star
Joined: Apr 2016
Posts: 364
Thank you, Dan!

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#2077970 - 05/10/16 08:37 PM Re: HI or Refi George
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Quote:
We have a similar situation. Commercial multi-family was purchased and not reported because it was temporary (secured by building). Now we are doing what was supposed to be HI but turns out a complete demo so now classified as a construction loan (still secured by building until dozers get to it). Will be interest only then converting to P&I. Is this a refinance? I am getting hung up on the fact it was never reported.

Sounds like 2 phase financing with a temporary phase (interest only) followed by the construction phase. That would be a purchase for HMDA, not a refinance.
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David Dickinson
http://www.bankerscompliance.com

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#2077999 - 05/10/16 10:06 PM Re: HI or Refi George
JobSecurity Offline
Platinum Poster
Joined: Oct 2009
Posts: 579
I have two different loans here. One was for the purchase that was temporary. Now I have the second loan that is two-phase. So my hang up is that it has never been reported and I am confused if it should be a purchase or refinance. I was not sure if I explained that well enough in the first email. Thanks David!

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