Thread Options
|
#2076358 - 04/29/16 03:34 PM
Guidance Line of Credit
|
Gold Star
Joined: Apr 2016
Posts: 364
|
Not sure how to report these. Here is my scenario:
Borrow approved for GLOC, taking some of the funds to refinance an investment property. Would this be reported as a refi? What if I don't see a payoff of any other loan on the HUD/borrower's statement, does that change anything?
Last edited by George; 04/29/16 04:37 PM.
|
Return to Top
|
|
|
|
#2076370 - 04/29/16 03:42 PM
Re: General Line of Credit
George
|
Gold Star
Joined: Jan 2015
Posts: 395
Maine
|
Do you currently normally report lines of credit to HMDA?
_________________________
Expect the worst, hope for the best and you'll never be disappointed.
|
Return to Top
|
|
|
|
#2076372 - 04/29/16 03:42 PM
Re: General Line of Credit
George
|
10K Club
Joined: Jul 2001
Posts: 84,334
Galveston, TX
|
A guidance line - that is not credit.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com
|
Return to Top
|
|
|
|
#2076376 - 04/29/16 03:47 PM
Re: General Line of Credit
George
|
Gold Star
Joined: Jan 2015
Posts: 395
Maine
|
Okay. His post heading stated General Line of Credit.
_________________________
Expect the worst, hope for the best and you'll never be disappointed.
|
Return to Top
|
|
|
|
#2076405 - 04/29/16 04:37 PM
Re: General Line of Credit
George
|
Gold Star
Joined: Apr 2016
Posts: 364
|
I apologize, I meant Guidance Line of Credit.
|
Return to Top
|
|
|
|
#2076423 - 04/29/16 05:18 PM
Re: General Line of Credit
George
|
10K Club
Joined: Aug 2002
Posts: 47,673
Bloomington, IN
|
A guidance line can work 2 ways.
Each advance is recorded on a "ledger" on the note that identifies the date and amount of each advance. I think this method is rarely used now. If this method is used then only the initial advance that was for a home purchase, home improvement or refinancing would be reported if the note is secured by a dwelling.
Each advance is evidenced by a separate note. If this method is used then each advance that was for a home purchase, home improvement or refinancing would be reported if the note is secured by a dwelling.
The advance to payoff an existing investment property you asked about would be reportable if it is dwelling secured and if the loan securing the investment property was dwelling secured. You can rely the consumer's stated purpose of the loan proceeds.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
|
Return to Top
|
|
|
|
#2076905 - 05/04/16 01:53 PM
Re: General Line of Credit
George
|
Gold Star
Joined: Apr 2016
Posts: 364
|
Dan, I mean to ask you this days ago: stated purpose is all that is needed to justify a refi, no evidence is needed?
|
Return to Top
|
|
|
|
#2077174 - 05/05/16 01:33 PM
Re: General Line of Credit
George
|
10K Club
Joined: Aug 2002
Posts: 47,673
Bloomington, IN
|
See Purpose Statement on page D-8 of the GIR.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
|
Return to Top
|
|
|
|
#2077624 - 05/09/16 03:51 PM
Re: General Line of Credit
George
|
Gold Star
Joined: Apr 2016
Posts: 364
|
Thank you sir, I appreciate it!
|
Return to Top
|
|
|
|
#2087561 - 07/12/16 04:00 PM
Re: General Line of Credit
George
|
Gold Star
Joined: Apr 2016
Posts: 364
|
I need to revisit this really quick because I was just asked about this compared to a similar scenario, and I am doubting my decision now.
Simply put: do we HAVE to be paying off a loan directly in order for our loan to be considered a refinance?
I decided to report this loan based on the Purpose Statement from the GIR. But I chose not to report a loan under similar circumstances originated prior to this loan.
|
Return to Top
|
|
|
|
#2087603 - 07/12/16 06:33 PM
Re: General Line of Credit
George
|
Gold Star
Joined: Apr 2016
Posts: 364
|
Thank you, Kathleen, but I don't know that that exactly answers my question. I know the definition, and it has always been my assumption that in order for a refi to be a refi that we need to pay off a loan directly. However, the Purpose Statement from the GIR states:
1. Purpose—statement of applicant. An institution may rely on the oral or written statement of an applicant regarding the proposed use of loan proceeds. For example, a lender could use a checkbox, or a purpose line, on a loan application to determine whether or not the applicant intends to use loan proceeds for home improvement purposes.
Does this mean that we do not have to pay off the loan ourselves? Or can we rely on the borrower's statement that he/she will payoff the existing loan with the proceeds? If so, then do we need some kind of proof of an existing loan? Otherwise, wouldn't this just be a cash out/home equity loan?
|
Return to Top
|
|
|
|
#2087623 - 07/12/16 07:26 PM
Re: General Line of Credit
George
|
Gold Star
Joined: Apr 2016
Posts: 364
|
That was my thought initially, then I was pointed to the statement and I just took it at face value.
|
Return to Top
|
|
|
|
#2087629 - 07/12/16 07:41 PM
Re: General Line of Credit
George
|
Gold Star
Joined: Apr 2016
Posts: 364
|
Yes ma'am! Again, that had always been my understanding, but that purpose statement is just so broad that it made me think. I have submitted an email to HMDAHelp to see if they can verify this for me. But I my inclination is to agree with you, based on the definition and all else, I would say this is not HMDA reportable.
|
Return to Top
|
|
|
|
#2087631 - 07/12/16 07:56 PM
Re: General Line of Credit
George
|
Gold Star
Joined: Apr 2016
Posts: 364
|
I agree. And without evidence, I am going to suggest that we do not report these if no other purpose is stated. At least that will keep consistency in how we report.
|
Return to Top
|
|
|
|
#2089286 - 07/21/16 07:29 PM
Re: General Line of Credit
George
|
New Poster
Joined: Sep 2015
Posts: 8
|
I have a question to piggyback off of this topic. What would the application date be for the advance done off the guidance line? Would it be the date the borrower requested the guidance line, or the date the advance was requested to use the funds for a purchase, home improvement or refinance of a dwelling?
|
Return to Top
|
|
|
|
#2148206 - 09/29/17 08:53 PM
Officer Guidance Line
George
|
Junior Member
Joined: Sep 2017
Posts: 30
|
Can we revisit an Officer Guidance Line again? I want to make sure I understand these and the HMDA reporting. For our institution we open the Guidance Line and then any draws/request or "subnotes" as we refer to them are produced. The subnotes are booked to our core system as individual loans. For HMDA reporting we don't report the original Guidance Line (as this is a line of credit) but we do evaluate each subnote and report the individual submit if HMDA applies. This is correct.....right? (And I am talking about current reporting....not future reporting for 2018 and beyond).
Last edited by ahargrove; 09/29/17 08:55 PM.
|
Return to Top
|
|
|
|
|
|