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#2185307 - 07/13/18 03:51 PM Collecting monitoring info on refinance loans
ineedhelp Offline
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Joined: Mar 2014
Posts: 169
Regulation B official interpretation for section 1002.13 explains transactions that are NOT covered (meaning NOT to collect government monitoring info) are applications made for a purpose other than a purchase or a refinance such as loans for home improvement and debt consolidation. I am receiving push back on this but I think the regulation is pretty clear that a loan that used the equity in the primary residence for other purposes should not have collected monitoring info.

Now, what about the refinance of such loan? I would think you wouldn't collect the government monitoring info on a refinance of a loan that originally was for a home improvement or debt consolidation but others have interpreted this differently. I do see a bit of a gray area I suppose.

Can anyone resolve this for us?

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Fair Lending
#2185317 - 07/13/18 04:13 PM Re: Collecting monitoring info on refinance loans ineedhelp
Adam Witmer Offline
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Joined: Sep 2010
Posts: 2,658
This is a great observation, indeedhelp, and is somewhat of a gray area where you will get two different opinions from those on these threads. I actually recorded a video on this last night (that won't be published until next week or so.) When I've taught seminars on this, I've always (tried to) word my language this way.. "...purchase or a refinance [starts to mumble and fade out...]of purchase money...." smile

I do that because I understand the debate, though I am (generally) in the camp that says to only collect it on a refinance of purchase money.

From the commentary:
"6. Refinancings. A refinancing occurs when an existing obligation is satisfied and replaced by a new obligation undertaken by the same borrower. A creditor that receives an application to refinance an existing extension of credit made by that creditor for the purchase of the applicant's dwelling may request the monitoring information again but is not required to do so if it was obtained in the earlier transaction."

Here is a thread that has a great debate on this topic: https://www.bankersonline.com/forum/ubbthreads.php/topics/2049256/Reg_B_Government_Monitoring_In
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Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
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#2185332 - 07/13/18 04:38 PM Re: Collecting monitoring info on refinance loans ineedhelp
ineedhelp Offline
100 Club
Joined: Mar 2014
Posts: 169
Thanks for the response and additional resources to help substantiate my side!

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