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#2164954 - 02/16/18 05:10 PM Re: HMDA Reportable Commercial Loans MFlea
RR Becca Offline
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out of the frying pan...
OK, good. So we're still safe with "never use the cash-out code."

Thanks!
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#2164958 - 02/16/18 05:14 PM Re: HMDA Reportable Commercial Loans MFlea
RR Joker Offline
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Yes, 31's all the way! smile
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#2165036 - 02/16/18 07:47 PM Re: HMDA Reportable Commercial Loans MFlea
David Dickinson Offline
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Agree. All of your refinancing would be a code 31.
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#2165169 - 02/20/18 05:06 PM Re: HMDA Reportable Commercial Loans MFlea
compliancejunkie Offline
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What about a consumer home equity loan, secured by the borrowers primary residence for the purpose of paying off a commercial loan. The business loan is in the name of an entity and is secured only by UCC's. Definitely not a hmda refinance. Can this be reported under hmda "other"?
Thanks for clarifying.

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#2165180 - 02/20/18 05:53 PM Re: HMDA Reportable Commercial Loans MFlea
David Dickinson Offline
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Yes. That's the only place it fits. Like you said, it's not a "refinance" because there is no common borrower.
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#2165184 - 02/20/18 06:04 PM Re: HMDA Reportable Commercial Loans MFlea
raitchjay Offline
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OK
Just curious though.....is there more money involved, or is this "consumer home equity loan" only paying off the commercial loan? If so, it isn't consumer purpose and wouldn't be reportable at all.
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#2165205 - 02/20/18 07:26 PM Re: HMDA Reportable Commercial Loans MFlea
RR Joker Offline
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It could be if the business no longer exists and they are paying it back on a personal level.
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#2165208 - 02/20/18 07:38 PM Re: HMDA Reportable Commercial Loans MFlea
raitchjay Offline
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OK
Could be.
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#2165273 - 02/21/18 02:09 PM Re: HMDA Reportable Commercial Loans MFlea
compliancejunkie Offline
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This is the same discussion we had at the office. The business still exists and the income from the business was used to qualify the borrower. Do we report using the Other classification or do we not report as not a consumer purpose?

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#2165282 - 02/21/18 02:47 PM Re: HMDA Reportable Commercial Loans MFlea
raitchjay Offline
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OK
A business purpose loan that isn't for the purpose of purchase, refi, or HI isn't reportable.
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#2165292 - 02/21/18 02:59 PM Re: HMDA Reportable Commercial Loans MFlea
compliancejunkie Offline
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Thanks for all of your input. It looks like I have a consumer Home Equity loan with the proceeds being used to pay off a business loan (not secured by the home and in the name of an entity) is not reportable. Got it!

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#2165295 - 02/21/18 03:13 PM Re: HMDA Reportable Commercial Loans MFlea
raitchjay Offline
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OK
I would not call your loan a "consumer home equity loan"....i'd call it a business purpose loan that happens to be secured by a home.
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#2165297 - 02/21/18 03:24 PM Re: HMDA Reportable Commercial Loans MFlea
compliancejunkie Offline
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It is disclosed as a consumer home equity loan. Does that change anything. The purpose stays the same.

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#2165299 - 02/21/18 03:25 PM Re: HMDA Reportable Commercial Loans MFlea
raitchjay Offline
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OK
No, how you disclosed it doesn't change it's true purpose.
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#2165301 - 02/21/18 03:41 PM Re: HMDA Reportable Commercial Loans MFlea
RR Joker Offline
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You gave up a lot of rights doing it that way, I would imagine. Ouch.
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#2165801 - 02/26/18 03:51 PM Re: HMDA Reportable Commercial Loans MFlea
Cindylou66 Offline
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I had a call with the CFPB attorney Friday. After the initial disclaimer that they always give, this attorney stated that she is of the opinion that you can certainly use "cash out refinancing" as a purpose for commercial loans and they will still be reportable, as cash out refinancings are considered a subset of refinancings and would still meet the refinancing purpose. So as long as you have a loan that is both dwelling secured AND for the purpose of cash out refinancing, it would be reportable. You would use the code (32 - cash out refinance) on the LAR for the business purpose loan.

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#2165809 - 02/26/18 04:08 PM Re: HMDA Reportable Commercial Loans MFlea
RR Joker Offline
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I absolutely agree...but I don't think the question was ever whether or not they were reportable. Just that it wasn't clear if, for commercial purpose, 32 was even recognized. If you price or set different terms for your commercial loans differently for C/O purposes, then you would report 32. If you don't, you would do just like on a consumer loan and report 31.
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#2165929 - 02/26/18 10:27 PM Re: HMDA Reportable Commercial Loans RR Joker
Cindylou66 Offline
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I understand, RRJoker, and I don't think I did the greatest job of wording that (lack of caffeine this morning!). I did mean to say that the attorney was stating the cash-out refinancing code (32) would be (SHOULD be for those vendors who aren't allowing it) recognized as an applicable code for a commercial transaction if it truly applied. And yes, I agree. If you don't price or set different terms, then you would still use 31 only...just like a consumer.

BUT...I also did mean to say that if you have a cash-out refinance for a commercial dwelling secured transaction, it is reportable and not exempt just because it isn't one of the original three purposes (home purchase, home improvement or refinance) as that was part of the conversation earlier on and I still continue to get asked that question, oddly enough. The attorney also stated that as well. So, while most of us were already of that assumption, just wanted to throw it out there for anyone who was still unsure and wanted to hear the CFPB's opinion. grin

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#2165931 - 02/26/18 10:31 PM Re: HMDA Reportable Commercial Loans MFlea
raitchjay Offline
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OK
Wait a minute.....if it isn't a true refinance (i know some people call equity loans "cash out refinances") then i do not agree that it is reportable, if it's business purpose. (This is why i never call equity loans "cash out refinances"...my HMDA brain won't let me.)
Last edited by raitchjay; 02/26/18 10:41 PM.
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#2165932 - 02/26/18 10:33 PM Re: HMDA Reportable Commercial Loans MFlea
raitchjay Offline
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OK
If it's an *actual* refinance (dwelling secured loan paying off a dwelling secured loan) AND there's cash out, and you treat them differently and want to classify as a cash-out, great....but the rules are very precise in what it takes for a business purpose loan to be reportable, and a cash out equity loan doesn't meet the test.
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#2165956 - 02/27/18 01:13 PM Re: HMDA Reportable Commercial Loans raitchjay
Adam Witmer Offline
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Originally Posted By raitchjay
(i know some people call equity loans "cash out refinances") ........(This is why i never call equity loans "cash out refinances"...my HMDA brain won't let me.)
I have the same problem, raitchjay. smile
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#2165964 - 02/27/18 02:41 PM Re: HMDA Reportable Commercial Loans MFlea
RR Joker Offline
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Me either...it's dangerous ground smirk

I can't stand 'renewal' for 'refinance' either laugh
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#2165967 - 02/27/18 02:49 PM Re: HMDA Reportable Commercial Loans RR Joker
RR Becca Offline
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out of the frying pan...
Originally Posted By RR Joker
Me either...it's dangerous ground smirk

I can't stand 'renewal' for 'refinance' either laugh


Nor can I. Unfortunately that usage is so prevalent here that I catch myself falling into it sometimes!
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