Good Morning HMDA lovers.

We have a business cusomter that regulary uses their own funds for a quick purchase of a dwelling.

They then come to us for financing to remiburments for the funds.

This does not fit into the standard defintition of purchase when looking at the "timing".

However, the use of the funds were to purchase a dwelling despite the timing.

Please chime in with thoughts on if it this is NOT reportable due to funds not used directly for Purchase/Refi/HI or reportable as a purchase?

Thanks

"However, the use of the funds were to purchase a dwelling despite the timing."

I know what you're trying to say, but you can't purchase something you already own. Not reportable as stated.

However, the use of the funds were to purchase a dwelling despite the timing.

The loan proceeds were not used to purchase a dwelling. They were used to replenish the borrower's bank account.

I agree - not reportable as stated.

Just to add more... We do these loans very frequently. Not reportable at this shop, either.

Loans to reimburse personal funds used for purchasing or improving are not reported for my shop either. The funds being loaned didn't facilitate the purchase or improvement.

Contrast that scenario, which I will agree is not reportable, with an open-end line of credit used to fund purchases of dwellings to be rehabbed and sold.

open-end line of credit used to fund purchases of dwellings to be rehabbed and sold

"Splash and dash" loans are not excluded from reporting. However, open-end lines of credit are only reported at account opening. Any use of the funds afterward the initial account opening to purchase or improve a dwelling would not be reportable.

reimbursement loans are common in our neck of the woods and we do not report them either.

Very late to the party on this, but I finally came across a similar scenario. Could this be coded as "Other" for purpose? In our situation, we had an individual buy a rental house in cash. They now are getting delayed financing to reimburse their personal cash reserves. While the property is investment, the funds seem seem to have consumer purposes as it is going towards an individual and the funds are not contingent on a commercial-only use (exempt Reg Z transaction) - equity could be used for whatever.

to reimburse their personal cash reserves

I would agree with Other.