I'll make it three on raitchjay and Joker's side.
And I'll also remind everyone of another HMDA issue a few years back, documented right here on BOL (involving David too, if I recall correctly) where a rogue HMDA government person declared something that rocked our worlds and was later disproven and retracted.
My recommendation to you, JPC, is that unless Mr Ponty is willing to put his OPINION in writing and state that it is the official CFPB stance, don't be so quick to hang your hat on it.
I have painful personal experience where basing reporting on 'someone in a phone call' led to resubmission.

I think they've done similar with TRID, too, TR.

It's kinda like calling HUD. You can call 3 people and get 5 different answers

That's sort of what i'm trying to say: i don't see this as a gray issue. I (personally) never would have called the CFPB on the issue because it isn't gray to me. So i don't need "clarification" from the CFPB on an issue that isn't gray to me.

Or the Fed's HMDA help that used to give you two different answers from two different people from only 1 single e-mailed question...

The only reason I call it a gray area is because the rules don't blatantly say in the rule or commentary "report it this way for this scenario."

Also, I see it as problematic that footnote 82 does not align with the purpose of HMDA which is to help show whether lenders are serving the housing needs of their communities.

JPC posted

I think you answered your own question here. Your mortgage is not secured by a dwelling if you convert it.

Adam....the point i'm trying to get across is to me, the "forward-look" or "backward-look" stuff just really is a moot point in my eyes......there is no controversy amongst any of us if a dentist's office is purchased and razed. Well, to me,when a structure that once upon a time was a dwelling but is no more is purchased and razed, it's exactly the same as the dentist's office scenario--not reportable. (Even a "backward-look" to me gets you the same result....looking back at a structure that is not a dwelling.) That's why i have been talking over and over again about the definition of a "dwelling" and a "residential structure".

Remember . . . I'm not jumping on anybody's bandwagon. This has been my take since the thread jumped off.

I still go back to my original analysis. At the time of getting the loan, the borrower purchases a property with a dwelling on it. You have a dwelling secured loan in the 50 states with no applicable exclusion. Therefore, you have a HMDA reportable loan. The borrower turning it into a Tonka Trunk 6 months in the future doesn't take away from that. Which is what the CFPB's stance on it and Footnote 82 that Adam referenced seems to consistently indicate. What secures the loan at the time of the transaction? A DWELLING!

It's secured by a dwelling at the time of the transaction. Yes, once you convert it, then it is no longer a dwelling. So, if you refinance the loan a couple years down the line and at that time you now have a converted structure, then, yes, feel free not to report that transaction. But, the original transaction involves the Purchase of a Dwelling.

I think there is something terribly wrong with that footnote. I don't know of very many reporters that 'currently report' a total transformation to commercial property.

(2) a loan to an individual to purchase or improve a single-family home to be used either as a professional office or as a rental property

Rental, certainly...professional office is lacking...I truly can only believe they must have meant an improvement loan to add an office to a single family dwelling...that would be and continues to be reportable.

Again, i'll point you to the definition of a "dwelling": Reg. C says a "dwelling" is a "residential structure (whether or not attached to real property) located in a state of the United States of America, the District of Columbia, or the Commonwealth of Puerto Rico. The term includes an individual condominium unit, cooperative unit, or mobile or manufactured home". They go no further in defining a "residential structure", so we must go to the dictionary for that.

So, a "residential structure" is "used as a residence or by residents", so obviously we need a definition of "residence" and we get "a building used as a home".

A structure being demolished is not being used as a home.

That footnote flies in the logic of their very own definitions. If they want that footnote to have any meaning, they must totally transform their own definitions.

You state "...the borrower purchases a property with a dwelling on it" as if that is just a given. That's the whole point. Without someone dwelling in it, or any intention of someone dwelling in it, it is NOT a dwelling.

And if the CFPB wants the definition of "dwelling" to mean something else, then they have to go in the regulation and change/clarify the definition.

I just don't see how residing in it makes a difference here. So, would you change your mind if they resided in it while it was being covered into a daycare facility? So, the borrower buys the "dwelling" (structure) and intends to convert it into a daycare facility or an elderly care home (transitory housing), but actually lives in the structure while the conversion is taking place. Would you report as a "Purchase" because the borrower temporarily lived in it, even though the end result is still an excluded type of property?

Assuming this loan wasn't otherwise exempt (don't know if we're talking about a temporary loan, but i'll assume for these purposes that we are not)--if the purpose of the loan were to purchase a structure, inhabit it temporarily whilst also converting it to a day-care facility (i find that concept pretty 'out there', but i'll go with it), yes, i would report it, because it will be used as a residence.

"I just don't see how residing in it makes a difference here." It makes a difference (IMO) because the definition of a "dwelling" is that someone LIVES there. Without someone living there or intending to live there, it does not meet the regulatory and dictionary definition of a "dwelling" or a "residential structure".

Why aren't transitory houses reportable? Because their "occupants have primary residences elsewhere". No one "lives" there. They're brick and mortar, have showers, have kitchens, bedrooms, etc. but they aren't a "dwelling" for HMDA purposes. So the argument that anything that you and i think of as a "house" must be reported is obviously not the case, or else we'd be reporting weekend beach homes.

This last statement is where I was just about to go. That and the dilapidated/condemned 'dwelling' that only mice and maybe vagrants [transitory at best] live it. This is not a dwelling...even though it may have been a house.

or else we'd be reporting weekend beach homes.

Why wouldn't we?

I completely agree, but it gave me enough heartburn to call the CFPB. I was totally expecting them to say one thing, but then they said what JPC is saying. I even called back to clarify and they held their ground.

The problem I have with reporting a loan where a dwelling will be torn down or converted to a non-dwelling is that the whole point of HMDA is to help show whether lenders are serving the housing needs of their communities.

A loan for a home to be torn down or converted to a commercial structure is not a loan for the housing needs of the community.

Because they meet the definition of 'transitory housing'.....their occupants have "primary residences elsewhere".

I totally agree with that. I personally think whoever y'all spoke to is all wet.

The only way a rent home purchase/refi/home improvement/home equity loan is reportable IMO is if the renters live there on a permanent basis. Weekend rentals don't qualify.

That's too transaction specific then to say that if the person lives in it while being converted, then it is a "Purchase." At a certain point the guidance has to be general enough to cover most scenarios.

It's cool, we already blew up this thread enough. I enjoyed the conversation. Interesting topic, but I'm good with considering these "Purchases."

I'm thinking weekend beach homes refer to rentals^ Like doing it as an AirBnB.

Originally Posted By raitchjay
The only way a rent home purchase/refi/home improvement/home equity loan is reportable IMO is if the renters live there on a permanent basis. Weekend rentals don't qualify.


The Commentary clearly states to report vacation homes . . .

[The definition of a dwelling is not limited to the principal or other residence of the applicant or borrower, and thus includes vacation or second homes and investment properties.]

This again brings up another good scenario. What if they use it as a vacation home for themselves some of the year and then rent it out as an AirBnB the rest of the year. Is it a dwelling?