In a situation where a customer tells a lender they will be looking at mobile homes over the weekend, the lender tells them to go ahead and write a check and they will do the loan on Monday to cover it, would that not be considered a purchase? Previously I would have considered this a 'reimbursement', but if the check would bounce, or the customer would not have written it without prior 'preapproval' from the lender, should it not still be reportable as a purchase? Also, our bank does not have a 'preapproval program' as defined by HMDA.

To me "cover it" means the borrowers don't have the money and the lender is going to make them a loan for the amount of the purchase. That's a "purchase" for HMDA.

If they have the money in their account and the lender will reimburse the purchase amount, I would agree it's not a purchase. It would be an "Other".

I surely hope it's not a consumer purpose loan~

Having said that, I believe it will fall under 'other' if that was to happen on a consumer level and would not be covered under a commercial purpose.

plus David's valid theory of 'cover it'.

I believe this mostly happens on the commercial side in our bank, not so much the consumer. I just wanted to be sure I was thinking about this the way an examiner might. Thanks David and RR Joker for the help!

Similar question......borrower paid out of pocket for home improvements. Borrower now wants a loan to 'reimburse' herself back. We will take a security interest in her residence. Under TRID we have it as Home Equity, but under HMDA would this be 'Other' and not 'Home Improvement', correct?

Thank you.

Correct....it's an "other", not home improvement.

Thanks for validating!