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#2251070 - 03/23/21 08:51 PM HMDA Pre-Approval

Just want to verify - Pre-approvals apply to Consumer Real Estate Loans, NOT Commercial real estate loan transactions?

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#2251344 - 03/26/21 09:35 PM Re: HMDA Pre-Approval Anonymous
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,232
Bloomington, IN
(2) Preapproval programs. A request for preapproval for a home purchase loan, other than a home purchase loan that will be an open-end line of credit, a reverse mortgage, or secured by a multifamily dwelling, is an application under this section if the request is reviewed under a program in which the financial institution, after a comprehensive analysis of the creditworthiness of the applicant, issues a written commitment to the applicant valid for a designated period of time to extend a home purchase loan up to a specified amount. The written commitment may not be subject to conditions other than:

I don't see business purpose listed under the "other than" category. If you have a preapproval program for covered transactions in the commercial loan area then you would report accordingly.
The opinions expressed are mine and they are not to be taken as legal advice.

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#2252122 - 04/09/21 06:04 PM Re: HMDA Pre-Approval Anonymous

Thanks Dan I had read this, but want to confirm - just because it's a commercial loan it does not exclude it from Pre-Approval - my lenders think pre-approval only applies to consumer purpose loans

I've recently found pre-approval letters during an audit for a couple commercial loans secured by 1-4 family properties - the way I read this from the regulation it does NOT apply only to consumer real estate loan transactions - commercial would be covered by a pre-approval program unless it is one of those three types specifically listed

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