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#2184950 - 07/11/18 06:24 PM Purchasing 3 houses one will be primary residence
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We have declined an application whereby the applicant planned to purchase 3 houses then do some repairs and sell one house, let family live in another house and finally, the 3rd house will be occupied by himself as primary residence. The application was handled by our commercial department. Should this be reported on HMDA as home purchase, principal dwelling or purchase of investment property?
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#2184952 - 07/11/18 06:28 PM Re: Purchasing 3 houses one will be primary residence Love those Regs
raitchjay Online
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2. Multiple properties with more than one property taken as security. If more than one property is taken or, in the case of an application, proposed to be taken as security for a single covered loan, a financial institution reports the covered loan or application in a single entry on its loan/application register and provides the information required by § 1003.4(a)(9) for one of the properties taken as security that contains a dwelling. A financial institution does not report information about the other properties taken as security. If an institution is required to report specific information about the property identified in § 1003.4(a)(9), the institution reports the information that relates to the property identified in § 1003.4(a)(9). For example, Financial Institution A originated a covered loan that is secured by both property A and property B, each of which contains a dwelling. Financial Institution A reports the loan as one entry on its loan/application register, reporting the information required by § 1003.4(a)(9) for either property A or property B. If Financial Institution A elects to report the information required by § 1003.4(a)(9) about property A, Financial Institution A also reports the information required by § 1003.4(a)(5), (6), (14), (29), and (30) related to property A. For aspects of the entries that do not refer to the property identified in § 1003.4(a)(9) (i.e., § 1003.4(a)(1) through (4), (7), (8), (10) through (13), (15) through (28), (31) through (38)), Financial Institution A reports the information applicable to the covered loan or application and not information that relates only to the property identified in § 1003.4(a)(9).
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#2184958 - 07/11/18 06:34 PM Re: Purchasing 3 houses one will be primary residence Love those Regs
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Yes, raitchjay, I saw that and understand that only one property will be reported. My question though remains, does this get reported as owner occupied as principal dwelling (and no, we do not know which of the 3 properties he planned to use for his own residence) or investment property?
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#2184962 - 07/11/18 06:41 PM Re: Purchasing 3 houses one will be primary residence Love those Regs
raitchjay Online
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(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.


Official Interpretation

Paragraph 4(a)(6)

1. Multiple properties. See comment 4(a)(9)-2 regarding transactions involving multiple properties with more than one property taken as security.
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#2184963 - 07/11/18 06:42 PM Re: Purchasing 3 houses one will be primary residence Love those Regs
raitchjay Online
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IOW, the answer is in the section i pasted above......whichever property you choose to report, you'll report the occupancy for that property.
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#2184967 - 07/11/18 06:43 PM Re: Purchasing 3 houses one will be primary residence Love those Regs
raitchjay Online
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Just saw the "we don't know which of the 3 properties he planned to use for his own residence". I don't know what to tell you--i think your loan officer should have been asking that.
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#2184970 - 07/11/18 06:45 PM Re: Purchasing 3 houses one will be primary residence Love those Regs
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I'd also question the validity of it being commercial. There are calculations needing to be made to justify that one...and it looks like it may well lean towards the majority of consumer money.

Just my 2 cents worth of observation.
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#2184972 - 07/11/18 06:47 PM Re: Purchasing 3 houses one will be primary residence Love those Regs
raitchjay Online
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Well, i thought about that too....but if we're just talking HMDA, it's reportable regardless since they're purchasing homes.
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#2184974 - 07/11/18 06:48 PM Re: Purchasing 3 houses one will be primary residence Love those Regs
raitchjay Online
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And i didn't necessarily take "handled by our commercial department" as meaning they didn't give Reg. Z disclosures...although it may have meant exactly that.
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#2184983 - 07/11/18 07:09 PM Re: Purchasing 3 houses one will be primary residence Love those Regs
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True...I have a habit of thinking full circle smirk
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#2185042 - 07/12/18 01:10 AM Re: Purchasing 3 houses one will be primary residence Love those Regs
burke116 Offline
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Quote:
does this get reported as owner occupied as principal dwelling

Keep in mind that it's not owner occupied anymore, it's borrower/applicant occupancy.

Quote:
(and no, we do not know which of the 3 properties he planned to use for his own residence)

Pick a property to report and make the lender tell you which it is.

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