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#355664 - 05/04/05 08:54 PM Collecting monitoring information
Anonymous
Unregistered

Section 202.13 states "we must collect monitoring information for credit primarily used for the purchase or refinancing of a dwelling occupied by the applicant as a principal residence." We have a customer whose loan we are refinancing with the initial purpose of home improvement. Does this refinancing count for monitoring information purposes? I tried to find a definition of refinancing but was unsuccessful. Thanks in advance for your assistance.

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#355665 - 05/04/05 08:59 PM Re: Collecting monitoring information
someone else Offline
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someone else
Joined: Aug 2004
Posts: 3,300
back to my roots
You may also want to check out your HMDA guidelines. You will collect data only in the following 3 scenarios:

1. Dwelling-secured loan used to purchase a dwelling
2. Dwelling-secured loan used to refinance a dwelling (you must pay off and satisfy the lien)
3. Dwelling-secured loan used to perform Home Improvement
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#355666 - 05/04/05 09:02 PM Re: Collecting monitoring information
Anonymous
Unregistered

Thankfully we are not a HMDA reporting bank so I am clueless to those guidelines.

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#355667 - 05/04/05 10:44 PM Re: Collecting monitoring information
GreatBlue Offline
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GreatBlue
Joined: Feb 2003
Posts: 2,362
Colorado
If you are not a HMDA bank, the refinancing of a home improvement loan, whether or not secured by real estate, does not require (or allow) collection of GMI.
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#355668 - 07/20/05 09:29 PM Re: Collecting monitoring information
Jan94 Offline
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Joined: Mar 2001
Posts: 828
USA
I was doing some review of some material I had regarding collecting monitoring information for REG B. In the list it noted bridge loans as being applicable. I honestly do not know where this came from and just wanted to confirm that it would not be required on a bridge loan. Reg B does refer to an exemption for temporary financing, but could there be an instance where Reg B would apply to a bridge loan? I've seen "bridge" loans secured by both the new dwelling and the current dwelling. If the loan is to help purchase the new dwelling secured by the new dwelling, why would it not apply? Thanks!

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#355669 - 07/20/05 10:05 PM Re: Collecting monitoring information
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,017
Bloomington, IN
Quote:

We have a customer whose loan we are refinancing with the initial purpose of home improvement. Does this refinancing count for monitoring information purposes?




No. You would not collect GMI under 202.13.


From the Commentary:

5. Transactions not covered. The information-collection requirements of this section apply to applications for credit primarily for the purchase or refinancing of a dwelling that is or will become the applicant's principal residence. Therefore, applications for credit secured by the applicant's principal residence but made primarily for a purpose other than the purchase or refinancing of the principal residence (such as loans for home improvement and debt consolidation) are not subject to the information-collection requirements. An application for an open-end home equity line of credit is not subject to this section unless it is readily apparent to the creditor when the application is taken that the primary purpose of the line is for the purchase or refinancing of a principal dwelling.

6. Refinancings. A refinancing occurs when an existing obligation is satisfied and replaced by a new obligation undertaken by the same borrower. A creditor that receives an application to refinance an existing extension of credit made by that creditor for the purchase of the applicant's dwelling may request the monitoring information again but is not required to do so if it was obtained in the earlier transaction.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#355670 - 07/21/05 02:22 AM Re: Collecting monitoring information
Anonymous
Unregistered

Are you stating that a bridge loan is considered a purpose other than purchase so the Reg B monitoring does not apply? Thanks.

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#355671 - 07/21/05 03:20 AM Re: Collecting monitoring information
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,017
Bloomington, IN
No I didn't say that. A bridge loan could or could not be subject to the GMI collection requirements under 202.13. It will depend what dwelling(s) are securing the bridge loan.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#355672 - 07/22/05 03:15 AM Re: Collecting monitoring information
Anonymous
Unregistered

So in the example above, Reg B monitoring information would be collected on a bridge loan to purchase a dwelling secured by the dwelling being purchased. Would that be a correct statement? I'm trying to finish up revising some training material and just want to be sure I've stated this correctly. Thank you for your help.

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#355673 - 07/22/05 02:18 PM Re: Collecting monitoring information
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,017
Bloomington, IN
Any loan, with the exception of a temporary construction loan, is subject to the Reg. B GMI data collection requirements if the loan is to purchase, or refinance the purchase of the applicant's primary dwelling and will be secured by that dwelling. Construction/permanent loans are subject to GMI data collection requirements.

1. Bridge loan secured by the primary dwelling being purchased. Collect GMI.

2. Bridge loan secured by the current/existing primary dwelling to purchase a new primary dwelling. Do not collect GMI.

3. Bridge loan secured by the current/existing primary dwelling to purchase a new primary dwelling and also secured by the new primary dwelling. Collect GMI.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#355674 - 07/22/05 08:05 PM Re: Collecting monitoring information
Anonymous
Unregistered

Dan - thank you so much, this is a great help!

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