Under HMDA, an assumption is a home purchase loan when the bank enters into a written agreement accepting a new borrower as the obligor on an existing obligation essentially to finance the new borrower's purchase of the dwelling securing the existing obligation (closed end or open end) correct? I am not seeing that the new borrower also needs to obtain the deed. Is that correct, or is it two part test, written agreement and deed/mortgage?

You mean you have an applicant that is going to assume the debt but not take any title to the property?

I found out more information about a specific loan assumption we had in the past. These are all related entities. Borrower A is requesting the obligation be assumed by borrower B and co-borrower C. This would include the legal obligation, property, all reps and warrants of the original loan. Through this process we identified that Borrower A (without our prior consent) transferred the property to new borrower B and now new borrower B desires to transfer it to new coborrower (C). So, from my understanding the assumption is to allow the entire obligation and property to be assumed by new borrower B and C. The assumption will also recognizing the transfer to the property. Is this a reportable assumption under HMDA? I believe it is but want to make sure.

Yes, it is reportable.

You are under no obligation to do this. Someone is playing games here. The original borrower most likely has violated your due on sale clause in your DOT/Mortage and has sold the property out of trust, which may be a violation of law in some jurisdictions. You need to analyze this with the potential for SAR filing.

Thanks rclarey. Will do.