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#2145503 - 09/11/17 03:05 PM HMDA Reportable
parr04 Offline
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oklahoma
Borrower currently owns 1/2 interest rental (1 to 4 family) dwelling. He is applied to borrow funds to pay off the other investor.
Would this loan be HMDA reportable?

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#2145522 - 09/11/17 04:13 PM Re: HMDA Reportable parr04
David Dickinson Offline
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Central City, NE
Questions:
1. Does you borrower legally own only ½ or is it like a husband and wife that co-own a home together (technically, each owns all of it)? IOW, this new loan would simply remove the other owner.

2. Is the new loan to also refinance any existing debt secured by this dwelling or is it completely new money to "purchase" the other ½?
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#2145527 - 09/11/17 04:23 PM Re: HMDA Reportable David Dickinson
parr04 Offline
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Our borrower owns 1/2 interest and the other investor (not spouse) owns the other 1/2 interest.
Completely new money. No Refinance.

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#2145561 - 09/11/17 07:28 PM Re: HMDA Reportable parr04
David Dickinson Offline
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So they are purchasing ½, but they already own it. I was hoping it was like a spouse so we could look at the commentary about "buying out" the other spouse, like this:

For example, assume that two spouses are divorcing. If both spouses are obligated on obligation X, but only one spouse is obligated on obligation Y, then obligation Y is a refinancing… On the other hand, if only spouse A is obligated on obligation X, and only spouse B is obligated on obligation Y, then obligation Y is not a refinancing… [Commentary to §1003.2(p) #4]

That doesn't quite fit, however. I'd like to call this a purchase (makes logical sense). I think this Commentary (about a "purchase") is close, however, it's not perfect:
If an institution making a first mortgage loan to a home purchaser also makes a second mortgage loan or line of credit to the same purchaser to finance part or all of the home purchaser’s downpayment, both the first mortgage loan and the second mortgage loan or line of credit are home purchase loans. Commentary to §1003.2(j) #4

I'd call it a purchase using this Commentary to support my decision. If an examiner wanted to argue, I'd look at them cross-eyed and ask what regulatory support they have to say not to report it.
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#2145568 - 09/11/17 07:51 PM Re: HMDA Reportable David Dickinson
parr04 Offline
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oklahoma
Thanks David.

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#2145592 - 09/11/17 08:47 PM Re: HMDA Reportable parr04
rlcarey Online
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I know that we should not mix regulations, but the CFPB pretty clearly stated that for TRID, you can't purchase something that you already own. Since this is rental property - you don't have to worry about TRID. But still???
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#2145621 - 09/11/17 10:24 PM Re: HMDA Reportable parr04
David Dickinson Offline
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Central City, NE
I can't disagree Randy. This one just doesn't fit, so I was trying to find something to support it. Do you think it should go unreported because it isn't a "purchase" and it's definitely not a "refinance"?
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#2145622 - 09/11/17 11:17 PM Re: HMDA Reportable parr04
rlcarey Online
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Galveston, TX
I would have a tendency to say it is a cash-out equity loan unless they are also paying off a current loan secured by the property to get it totally in the name of one of the remaining property owners and in which the remaining property owner is liable. But, it is sort of a current grey area, but in 2018 I believe it would be an "other".
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#2162992 - 02/02/18 07:39 PM Re: HMDA Reportable parr04
Greg Purkeypile Offline
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We have a loan on 12 townhomes for a total of 24 units and a condo building with 14 condos . The mortgage on the townhomes is a lot and block description covering the real estate the townhomes are built upon. The borrower has ownership in 10 of the 14 condo units. The legal description has Parcel 1 and then the unit numbers and then followed by a condominium name located on Lot 2 Bock 4......

All the units are leased out.

Is this counted as a 1-4 family Property type or Multifamily?

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#2163019 - 02/02/18 08:58 PM Re: HMDA Reportable parr04
David Dickinson Offline
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Central City, NE
Multifamily means there are 5 or more units under one roof. I don't know if I can answer your question from the info provided.
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#2163592 - 02/08/18 01:28 AM Re: HMDA Reportable parr04
Rocky P Online
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Look at how the properties are titled. A 14 unit condo is normally 14 1-4 family units, even if the same ownership. Can each of the 14 units be sold independently?
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