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#2226175 - 11/22/19 03:34 PM HMDA Reportable?
clinds Offline
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We had a customer who purchased a single family residence with cash. The customers business then took a loan out to reimburse the customer for the property and the property was deeded to the business using the single family residence as collateral. Is this HMDA Reportable as a purchase?

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#2226178 - 11/22/19 03:42 PM Re: HMDA Reportable? clinds
Mountaineers_Fan Offline
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Unless I'm missing something, I believe yes. It sounds like the business is purchasing the property from your customer, as an individual.

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#2226189 - 11/22/19 05:16 PM Re: HMDA Reportable? clinds
Melissa S Offline
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My understanding is that would depend on whether the property was deeded to the business before the business took out the loan, or if the transfer occurred concurrent with closing the business loan.
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#2226300 - 11/25/19 08:59 PM Re: HMDA Reportable? clinds
Andy_Z Offline
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Based on the common sequence of events the business is an entity, and it purchased the home, and pledged it as collateral to the loan in that purchase. Melissa brings up a valid point as to the ownership, otherwise it looks like a cash out loan, but it isn't a refi.
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#2226774 - 12/04/19 10:53 PM Re: HMDA Reportable? Andy_Z
clinds Offline
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If the property was deeded over to the LLC prior and now the LLC is taking out a loan with property used as collateral, then would it be HMDA reportable as a cash-out refi?

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#2226776 - 12/04/19 11:32 PM Re: HMDA Reportable? clinds
Adam Witmer Offline
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clinds: The LLC already owns the property since it was previously deeded over, so it can't be a purchase. Whether it can be reported as a refinance will depend on what is happening with the loan. For example, are you satisfying and replacing another loan to the same borrower? If it isn't the same borrower - which it may not be since the loan was deeded over to the LLC - then it can't be a refinance. Therefore, (and assuming you don't have a home improvement purpose tucked in there) your only option would be other - but other isn't an option for business purpose loans - so it may not be HMDA reportable at all.

So the question is: are you satisfying and replacing another loan to the same borrower?
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#2226777 - 12/04/19 11:37 PM Re: HMDA Reportable? clinds
Adam Witmer Offline
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Originally Posted by clinds
We had a customer who purchased a single family residence with cash. The customers business then took a loan out to reimburse the customer for the property and the property was deeded to the business using the single family residence as collateral. Is this HMDA Reportable as a purchase?

Just to clarify, this original question is a slightly different scenario. In this example, it would appear to be a purchase as it appears the property is being deeded over at the time of the loan. If that isn't the case, such as the deeding occurring prior to the loan to the LLC (as your second question states), then the answer would be different.

To me, it can only be a purchase if the ownership is changing hands with the loan. If the ownership changed before the loan, it won't be a purchase.
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