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#2130466 - 05/15/17 04:36 PM Parent down payment
jmm Offline
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Joined: Mar 2015
Posts: 21
I believe the following scenario should be reported as "Purchase" for HMDA but would like other opinions. The parent is refinancing existing loan and taking cash our for credit card debt along with funds for downpayment for daughter to purchase a home. I understand if this borrower was purchase another home themselves and this was the downpayment for sure would report it as purchase, but looking for opinion. The only way I knew this was what the funds were for was lender comments in the file. The disbursement funds were given directly to borrower. Any reference in the Reg would be greatly apprciated, I did not find anything definite.

Thanks in advance.

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#2130471 - 05/15/17 04:49 PM Re: Parent down payment jmm
raitchjay Offline
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Joined: Oct 2009
Posts: 8,568
OK
If you have a HMDA refi (dwelling-secured on both loans, with at least one borrower the same), then i agree it's reportable, but i would stick with the refinance classification--giving your child a gift doesn't equate to a HMDA purchase.
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#2130472 - 05/15/17 04:50 PM Re: Parent down payment jmm
raitchjay Offline
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Joined: Oct 2009
Posts: 8,568
OK
And you aren't going to find anything in Reg. C or the GIR that directly touches on this subject--but what a non-borrower gets to do with gifted funds is irrelevant under HMDA IMHO.
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#2130509 - 05/15/17 08:22 PM Re: Parent down payment jmm
JSD Offline
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JSD
Joined: Oct 2000
Posts: 512
USA
The funds your customer walks away with is not purchasing a home - it is a gift to their daughter. Not reportable transaction here!

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#2130625 - 05/16/17 03:59 PM Re: Parent down payment JSD
Truffle Royale Offline

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Posts: 17,285
Quote:
The parent is refinancing existing loan...


Sorry, JSD, but I disagree with you.
As raitchjay pointed out, the parent is refinancing.
Right there you have a reportable Refinance for HMDA.
Paying off additional debt and gifting money to child do not change that.

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#2130638 - 05/16/17 05:04 PM Re: Parent down payment jmm
JSD Offline
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JSD
Joined: Oct 2000
Posts: 512
USA
TR - you are correct that it would be refi. I was focused on the gifting!

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