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#2067642 - 03/04/16 07:22 PM
Re: multiple
kkdee13
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Platinum Poster
Joined: Dec 2008
Posts: 729
Tennessee
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We have loan secured by multiple "dwelling" properties being refinanced with cash out for possible purchase of more investment "dwelling" properties in the future....I said this is a purchase transaction and to report the location information for any one of the multiple "dwelling" properties securing the loan (although a purchase-no property or properties have been identified)
Is this correct?
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#2067689 - 03/04/16 08:53 PM
Re: multiple
kkdee13
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Power Poster
Joined: Aug 2001
Posts: 7,351
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Are you giving the cash out directly to the borrower? If so, I think this is just a cash-out refinance.
Just my opinion.
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The more you sweat in training, the less you bleed in battle.......
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#2067708 - 03/04/16 09:37 PM
Re: multiple
kkdee13
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Platinum Poster
Joined: Dec 2008
Posts: 729
Tennessee
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I thought if the borrower expressed their intent to purchase....you report purchase....
Last edited by Compliance504; 03/04/16 09:39 PM.
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#2067719 - 03/04/16 10:06 PM
Re: multiple
kkdee13
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Diamond Poster
Joined: May 2011
Posts: 1,987
Idaho
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Based on your statement " with cash out for possible purchase", I would probably report as a refinance. IMO the "possible" language isn't strong enough to say that is the borrower's intent.
I think you could argue it either way, so if you report as a purchase, just make sure the file is documented well regarding the borrowers stated purpose.
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All opinions are my own, not my employer's
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#2067720 - 03/04/16 10:41 PM
Re: multiple
kkdee13
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Platinum Poster
Joined: Dec 2008
Posts: 729
Tennessee
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Thanks to you both.....I'll be sure to read the write up......
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#2067729 - 03/05/16 12:29 AM
Re: multiple
kkdee13
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Diamond Poster
Joined: Dec 2013
Posts: 1,399
CA
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Possible/potential/future purchase - I would not report as purchase - it is not clear and speculative. We know they are refinancing, we don't know they are using the funds towards the purchase of a dwelling.
If they say they are taking cash out to buy an SFR investment I would report as purchase
You can always email the LO and get something from them in writing as to what the applicant's intent is. (for extra documentation either way).
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The opinions expressed are mine, do not represent the opinions of my employer, and they are not to be taken as legal advice.
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#2067852 - 03/07/16 06:11 PM
Re: Lien status - purchase, mulitple dwellings?
kkdee13
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Platinum Poster
Joined: Dec 2008
Posts: 729
Tennessee
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Thanks, Darth.
If I have a purchase of multiple properties, secured by different multiple properties....it is unclear to me for the Getting Right Guide if we are supposed to report the location information on of the properties taken as security or one of the properties being purchased. Can someone please confirm for me which it is.....
2. Property location—multiple properties (home purchase/refinance of home purchase). For a home purchase loan, an institution reports the property taken as security. If an institution takes more than one property as security, the institution reports the location of the property being purchased if there is just one. If the loan is to purchase multiple properties and is secured by multiple properties, the institution reports the location of one of the properties or reports the loan using multiple entries on its HMDA/LAR (with unique identifiers) and allocating the loan amount among the properties.
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#2067863 - 03/07/16 06:34 PM
Re: Lien status - purchase, mulitple dwellings?
kkdee13
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Power Poster
Joined: Oct 2009
Posts: 9,110
OK
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Is your loan secured entirely by properties that are NOT being purchased? Or is it secured partly by properties being purchased and other properties not being purchased? If you have any purchase property as your collateral, report that. If you don't, choose one of the other properties at your discretion and report it.
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#2067867 - 03/07/16 06:47 PM
Re: Lien status - purchase, mulitple dwellings?
kkdee13
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Platinum Poster
Joined: Dec 2008
Posts: 729
Tennessee
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Thanks raitchjay....I'm probably beating a dead horse here.....when you say choose one of the other properties at your discretion....we can choose either one of the properties securing the loan or one of the properties being purchased at our discretion....is that correct?
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#2067870 - 03/07/16 06:52 PM
Re: Lien status - purchase, mulitple dwellings?
kkdee13
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Power Poster
Joined: Oct 2009
Posts: 9,110
OK
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You don't report any of the properties being purchased UNLESS they secure your loan. If your loan is entirely secured by properties that are NOT being purchased with your loan funds, then you simply pick one and report it.
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I'm fixin' to fix that.
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#2067889 - 03/07/16 07:38 PM
Re: Lien status - purchase, mulitple dwellings?
kkdee13
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Platinum Poster
Joined: Dec 2008
Posts: 729
Tennessee
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#2097087 - 09/06/16 08:03 PM
Re: Lien status - purchase, mulitple dwellings?
kkdee13
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Platinum Poster
Joined: Feb 2010
Posts: 835
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I have a similar issue to Compliance504. Commercial LOC with 1 collateral only dwelling and 3 purchase dwellings taken as collateral. We want to report all properties for HMDA. For the LAR, how do I distribute the loan amount among the 4 properties? Even split between all four? The collateral only property is throwing a kink in things.
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Opinions expressed are my own and do not reflect the views of my employer.
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#2097092 - 09/06/16 08:10 PM
Re: Lien status - purchase, mulitple dwellings?
kkdee13
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Diamond Poster
Joined: May 2011
Posts: 1,987
Idaho
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Why do you want to report all 4 properties. It just creates more work and more possibilities for errors. We would choose one of the properties being purchased and report the whole loan using that address.
If you are set on reporting as 4 separate line items, you allocate the loan amount among the properties. See the GIR page D-9:
Property location—multiple properties (home purchase/refinance of home purchase). For a home purchase loan, an institution reports the property taken as security. If an institution takes more than one property as security, the institution reports the location of the property being purchased if there is just one. If the loan is to purchase multiple properties and is secured by multiple properties, the institution reports the location of one of the properties or reports the loan using multiple entries on its HMDA/LAR (with unique identifiers) and allocating the loan amount among the properties.
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All opinions are my own, not my employer's
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#2097095 - 09/06/16 08:12 PM
Re: Lien status - purchase, mulitple dwellings?
JC (Darth HMDA)
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Diamond Poster
Joined: May 2011
Posts: 1,987
Idaho
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Why do you want four LAR entries?
IMO you cant report the other purchased properties. For purchases, you only report the collateral - as you only have one parcel as collateral that is all we would report.
I read *W*W's post to mean the borrower is purchasing 3 dwelling but the loan is secured by 4 dwellings, so there is one dwelling that is "collateral only".
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All opinions are my own, not my employer's
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#2097129 - 09/06/16 09:37 PM
Re: Lien status - purchase, mulitple dwellings?
kkdee13
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Platinum Poster
Joined: Feb 2010
Posts: 835
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Correct, TMatt. We're a small bank. Very commercial loan driven. During a recent Fair Lending exam, we determined it would be beneficial to our overall Fair Lending compliance to report all properties on loans like this LOC and get "credit" for lending in potential census tracts where we otherwise may not have received credit if we only reported 1 of the properties.......The problem now is the loan amount.
I've read the GIR D-9, the hypothetical problem I'm left with is, "what if they pay down the loan and purchase additional property?" Won't that inflate the loan amount? How do I determine the amount to assign to a "collateral only" property? It seems illogical to simply take my loan amount and divide by 4.
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Live Like No One Else! CRCM
Opinions expressed are my own and do not reflect the views of my employer.
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#2097133 - 09/06/16 09:48 PM
Re: Lien status - purchase, mulitple dwellings?
kkdee13
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Diamond Poster
Joined: May 2011
Posts: 1,987
Idaho
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I don't believe the regulation or GIR indicates how to allocate the loan amount among the collateral properties. You could divide the loan amount by 4, allocate the loan amount based on the value of each property, or any other way you wish.
To your hypothetical "what if they pay down the loan and purchase additional property": We don't report LOCs, so I'm not real familiar with the reporting requirements, but I am pretty sure you just report the max credit of the LOC and the collateral property at the time of origination. You would have no reporting obligations if the LOC funds are used to purchase additional dwellings unless the LOC was refinanced.
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All opinions are my own, not my employer's
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#2097190 - 09/07/16 02:55 PM
Re: Lien status - purchase, mulitple dwellings?
kkdee13
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Platinum Poster
Joined: Feb 2010
Posts: 835
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Thank you, TMatt. I appreciate your time.
_________________________
Live Like No One Else! CRCM
Opinions expressed are my own and do not reflect the views of my employer.
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