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#2125276 - 04/06/17 02:40 PM "Waterfall" of Loan Purpose
Cheli Offline
Platinum Poster
Cheli
Joined: May 2013
Posts: 919
Good morning,

I would like to make sure that I am understanding the waterfall, or tier, of what to report for the Loan Purpose attribute. Would a guru be able to provide feedback whether or not I understand correctly? Thank you -

1) For 2018 reporting, does Refinance and Cash-Out Refinance trump Home Improvements, albeit, the LAR will code Home Improvements as Code-2, and Refinance Code-31 and Cash-Out Refinance Code - 32?

2) If yes, than it seems that there will be less loans reporting under Home Improvement because the Refinance will trump. Correct?

3) Last, will loans report now when the dwelling is currently free and clear, and the cash-out is for another reason than Home Improvements, causing Code-4 Other to report?


Thank you

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#2125315 - 04/06/17 04:20 PM Re: "Waterfall" of Loan Purpose Cheli
#12 Offline
Diamond Poster
Joined: Jun 2005
Posts: 1,338
I'm not a guru, but I'll take a stab at it.

1. yes
2. yes
3. If it is a consumer loan secured by a dwelling, then yes.
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CRCM

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#2125320 - 04/06/17 04:29 PM Re: "Waterfall" of Loan Purpose Cheli
Cheli Offline
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Cheli
Joined: May 2013
Posts: 919
We're on the same page #12 - Thank you.

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#2125751 - 04/10/17 09:27 PM Re: "Waterfall" of Loan Purpose Cheli
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
#12 gave you the correct answers. Here's some details:

1. You've already discovered that the waterfall does not line up with the numbering. If it's not a purchase (code 1) and If ANY of the money is to refinance (code 3), then it's reported as a "refinance" even if there's HI funds too (code 2). Yep, code 3 comes before code 2. CFPB logic!

2. The CFPB indicated there were a lot of HI loans reported that distorted their data. Because majority never wins in HMDA reporting, many loans that are more refinancing and a little extra for HI were being reported as HI. Thus, they reversed the waterfall order.
_________________________
David Dickinson
http://www.bankerscompliance.com

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#2125779 - 04/11/17 01:32 PM Re: "Waterfall" of Loan Purpose Cheli
Cheli Offline
Platinum Poster
Cheli
Joined: May 2013
Posts: 919
Thank you, David, for the information to further my knowledge.

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