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#2173674 - 04/16/18 05:47 PM Business purpose clarification....
graygirl Offline
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Joined: Jan 2018
Posts: 13
So a business purpose loan (purchase restaurant equipment) that is secured by a primary residence would ONLY be reportable if a prior loan secured by the residence was satisfied and replaced by the new loan? Making it a true Refinance? I'm reading the FFIEC guide page 268:

Examples—excluded business- or commercial-purpose transactions. The following are
examples of closed-end mortgage loans and open-end lines of credit that are not covered loans
because they primarily are for a business or commercial purpose, but they do not meet the
definition of a home improvement loan under §1003.2(i), a home purchase loan under
§1003.2(j), or a refinancing under §1003.2(p):

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#2173680 - 04/16/18 05:52 PM Re: Business purpose clarification.... graygirl
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,652
The Swamp
Right. You have to satisfy the HMDA purpose test first.
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#2173685 - 04/16/18 06:04 PM Re: Business purpose clarification.... graygirl
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
I agree. Business purpose home equity loans are not reported (only consumer purpose). If either of these is refinanced, then they are reported, but as a "refinance" for HMDA.
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#2200376 - 12/11/18 08:15 PM Re: Business purpose clarification.... graygirl
Debbie Offline
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Joined: May 2016
Posts: 16
A business purpose home equity loan would be reportable if the proceeds were to purchase a rent house, right?

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#2200377 - 12/11/18 08:29 PM Re: Business purpose clarification.... graygirl
Adam Witmer Offline
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Joined: Sep 2010
Posts: 2,612
Yes, it would be reportable as a purchase.
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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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