If a customer is doing a cash out refi on their current primary dwelling to purchase a new primary residence, how do we code the collateral for HMDA? Do we code the loan based on what the collateral is as of note date, or what the intended use is?

If you are talking about the owner occupancy field, I would report the intended use.

Under current rules:

Purpose - Home Purchase

Occupancy - you report the information and occupancy status for the property securing the loan

Would we code the occupancy as primary because that's what the loan is at closing, or investment because that's the intended use?

We would report owner-occupied since that is the status of the property at loan closing.

Thank you very much!!

Bringing back this old thread....I understand and agree that the dwelling being refinanced with cash out should be coded owner-occupied, since the borrower is currently living there and rescission would apply. However, what if the bank is also financing the purchase of the new primary residence? Would that be reported as owner-occupied as well? I'm having a hard time accepting this borrower will have two primary residences with different addresses on the same LAR.

(6) Whether the property identified in paragraph (a)(9) of this section is or will be used by the applicant or borrower as a principal residence, as a second residence, or as an investment property.

I've reported two primaries based on circumstances.

A common example would be a bridge loan.

Borrower takes out bridge loan on their existing primary for a down payment on a new primary. The bridge loan will be paid with the sale of the existing primary. This loan is not exempt as temporary financing. The dwelling is being used as the borrower's primary.

Second loan secured by the primary to be purchased. This dwelling will be used as the borrower's primary.