Skip to content
BOL Conferences
Thread Options
#2288795 - 09/18/23 10:23 PM Maybe a Purchase? or Refinance?
LoanLady Offline
100 Club
Joined: Sep 2006
Posts: 110
Borrower A owns property in his personal name, and has a mortgage (X) on the property.
The LLC that Borrower A owns 50% of is getting a loan (Y) to payoff the current Mortgage (X) on the property.
Borrower A is deeding the property to the LLC on the same day the new Loan Y is paying off Mortgage X. Both loans are to be secured by the rental dwelling. Borrower A and his 50% partner will guaranty the debt, but are not listed as borrowers.

The title company does not show this as a purchase. The settlement statement shows the property in the LLC's name (again, transfer being made the same day). Lender is calling it a refinance. Sounds like a purchase to me, except for title company's documents.

Reportable? How?

Return to Top
HMDA

   
HMDA Academy
#2288796 - 09/18/23 10:40 PM Re: Maybe a Purchase? or Refinance? LoanLady
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,005
Galveston, TX
If the property is being transferred outside of the loan and it happens prior to the loan, then this is not a purchase or a refinance as you are not paying off a loan to the same borrower. It would be an other purpose and not reportable since it is a business purpose loan..

(p) Refinancing means a closed-end mortgage loan or an open-end line of credit in which a new, dwelling-secured debt obligation satisfies and replaces an existing, dwelling-secured debt obligation by the same borrower.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top

Moderator:  SMQ, CRCM