Thread Options
#2153445 - 11/14/17 04:19 PM Loan Purpose- Not Applicable.
Permissible Purpose Offline
Member
Joined: Sep 2017
Posts: 56
Good morning everyone,

I have a question regarding loan purpose.

It looks like a new loan purpose selection has been added as of 8/2017 (version 3.1 of filing instructions) The code is 5, which is "Not Applicable".

Looking over Paragraph 4 (a)(3), I do not see any commentary or guidance on how/when this code should be used. So I am wondering if we would use "NA" in the same manner as we do for certain, other data fields that require "NA" to be reported when the application is withdrawn by the application or closed for incompleteness. Would anyone happen to know? Are there specific guidelines as to when this code should be used?

Thank you!

Return to Top
HMDA

   
HMDA Academy
#2153456 - 11/14/17 04:40 PM Re: Loan Purpose- Not Applicable. Permissible Purpose
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,572
The CFPB has a guide that explains NA codes: https://s3.amazonaws.com/files.consumerf...rence-chart.pdf

From this guide:

Enter “NA” for purchased covered loans where origination took place prior to January 1, 2018, Comment 4(a)(3)-6.
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

Return to Top
#2153460 - 11/14/17 04:43 PM Re: Loan Purpose- Not Applicable. Permissible Purpose
RR Joker Offline
10K Club
RR Joker
Joined: Nov 2002
Posts: 20,644
The Swamp
Very good question. Bizarre!

Along those same lines, I'd like an example of a Business/Commercial purpose that falls into (2) Not primarily for a business or commercial purpose.
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

Return to Top
#2153465 - 11/14/17 05:06 PM Re: Loan Purpose- Not Applicable. Permissible Purpose
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,572
Joker, I thought code 2 in the Business/Commercial purpose field (#48) would be used for all consumer-purpose loans. Basically, if not subject to Reg Z, code 1. If subject to Reg Z, code 2.

Am I missing something?
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

Return to Top
#2153475 - 11/14/17 05:31 PM Re: Loan Purpose- Not Applicable. Adam Witmer
Permissible Purpose Offline
Member
Joined: Sep 2017
Posts: 56
Thanks Adam. This is helpful info.

So if my institution never purchases covered loans, this code should never be used. Correct?

Thanks!

Return to Top
#2153478 - 11/14/17 05:39 PM Re: Loan Purpose- Not Applicable. Permissible Purpose
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Correct.
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top
#2153483 - 11/14/17 05:50 PM Re: Loan Purpose- Not Applicable. Adam Witmer
RR Joker Offline
10K Club
RR Joker
Joined: Nov 2002
Posts: 20,644
The Swamp
Originally Posted By Adam Witmer, CRCM
Joker, I thought code 2 in the Business/Commercial purpose field (#48) would be used for all consumer-purpose loans. Basically, if not subject to Reg Z, code 1. If subject to Reg Z, code 2.

Am I missing something?


Didn't even think about it in that context, Adam. That is the most likely explanation! laugh!
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

Return to Top
#2153507 - 11/14/17 07:02 PM Re: Loan Purpose- Not Applicable. David Dickinson
Permissible Purpose Offline
Member
Joined: Sep 2017
Posts: 56
Thanks David! Great meeting you at the recent ABA Foundational Course BTW.

Return to Top
#2237995 - 06/12/20 03:11 PM Re: Loan Purpose- Not Applicable. Permissible Purpose
Compliance NABW Offline
Diamond Poster
Joined: Oct 2015
Posts: 1,486
What about for loans purchased after 1/1/2018? If nothing else is taking place, would you report the purpose as "Other," or do you report based on what it was when originated, i.e. get the info from the seller/existing documentation?
Last edited by Compliance NABW; 06/12/20 03:26 PM.
Return to Top
#2237997 - 06/12/20 03:37 PM Re: Loan Purpose- Not Applicable. Permissible Purpose
hmdagal Offline
Power Poster
hmdagal
Joined: Dec 2002
Posts: 3,812
We use the documentation from the seller to report the original purpose.

Return to Top
#2238039 - 06/12/20 08:06 PM Re: Loan Purpose- Not Applicable. Permissible Purpose
Diane Dean Offline
Member
Joined: Oct 2012
Posts: 92
I would agree you're going to need to get the information from the seller/file documentation. As Adam stated, you can only use NA for loans you purchase that were made prior to January 1, 2018.
_________________________
Diane Dean
http://www.bankerscompliance.com

Return to Top
#2238146 - 06/16/20 02:17 PM Re: Loan Purpose- Not Applicable. Diane Dean
Compliance NABW Offline
Diamond Poster
Joined: Oct 2015
Posts: 1,486
Yeah, I wasn't calling for using "N/A," but thought that the Regulation could potentially be requiring this to be a form of an actual transaction where you would classify it an "Other" for Loan Purpose.

Return to Top