This loan is very hard to make heads or tails of. The borrower purchased the land in late 2004. The 1003 indicates loan purpose as debt consolidation. The appraisal indicates property is subject to the manuf. home being affixed to the land. In our system, the loan is coded as a Purchase transaction with HMDA reporting purpose as Purchase. The borrower walked away with $14,000+ dollars. There is a payoff to XXX Homes, LLC of $19,000 on the HUD-1; however, I do not see any liens showing on the title commitment. The underwriter reflects a purchase price of $140,000 on the loan approval and indicates loan is a purchase; however, the DU findings show limited cash out refinance. The underwriter also requested a copy of the purchase contract for the manuf home and HUD-1 on the purchase of the lot? What should the HMDA purpose be?

P.S. The branch also ran this thru our predatory lending software as a purchase. Shouldn't they have ran it as a refinance? They also did not give the borrower RoR based on notes in the file....

Sounds to me the loan was for consolidation purposes and the purchase of a manufactured home. If the loan is secured by the manufactured home, or another dwelling, then it would be a purchase transaction for HMDA reporting purposes. If it is not secured by the manufactured home, or another dwelling, then it is not HMDA reportable.

Is the manufactured home titled? (I'm assuming you are talking about a mobile home.) Your title work may not show a lien on a title, just liens on the real estate. Also, is the loan secured by the dwelling or just the land? If you are NOT taking a lien on the manufactured home (mobile home) then the loan is not reportable. It is difficult to determine the loan purpose from the description you gave. Did the borrower use these proceeds to purchase the home? Or had he already purchased it with financing through XXX Homes, LLC? You need to determine if the loan was for purchase with extra monies for bills or if it was to payoff an existing lien and other debts.

I think this loan should have been ran thru predatory lending as a refinance and RoR should apply.

Okay, here's some additional info. There is a HUD-1 showing that the borrower paid cash for the lot in late 2004. She also signed a purchase contract during the same timeframe purchasing the manuf. home. She paid $83,000 for installation and set-up. At that time, she put $18,500 down as a deposit. Our loan closed in May of this year. The HUD-1 reflects "payoff" of $19,000 to XXX Homes LLC, the seller on the purchase contract. The purchase contract for the manuf. home does not indicate whether financing was involved. Our appraisal was completed "subject to final inspection" and photos show a manuf. home on the property. Appraisal was completed at the very end of March. Still a purchase for HMDA reporting purposes; but, a refinance for predatory lending and rescission?

What makes you think this a refinance?

There is a payoff to XXX Homes, LLC of $19,000 on the HUD-1;

The underwriter also requested a copy of the purchase contract for the manuf home and HUD-1 on the purchase of the lot?

This sure sounds to me the borrower was purchasing a manufactured home from XXX Homes, LLC. What he did with cash out equity from the land has no bearing. If any of the proceeds of this loan was to purchase the manufactured home, and the loan is secured by a dwelling, it is a purchase transaction.

However, I don't have the luxury of seeing the file or talking to the lender, so my speculation is based on what is posted.

Too many ifs and buts without seeing the file or talking to the lender, but I am saying this is a Residential Mortgage Transaction and not subject to rescission or HOEPA, however can't speak for your state predatory laws.

I agree that there are too many ifs and whats....there were two HUD-1s in the file for our transaction. One shows "payoff borrower loan" on the 1st page for $19,000. The other one shows "payoff to XXX Homes, LLC" on the 2nd page for $19,000.

Were you paying off a loan, or were you paying off the balance owed on the purchase price and set up of the manufactured home? The answer to this question will dictate whether you have a RMT or a refinancing.

Just got confirmation that the $19,000 showing on the HUD-1 was used to payoff the seller of the manuf. home. There was no loan involved.

I do have another general question. If a loan is a transaction is a cash out refinance where proceeds are used to purchase another property (such as 2nd home or investment), wouldn't section 32 testing still apply? I guess I'm getting a little confused by previous comments indicating the above transaction is a RMT and RoR and section 32 would not apply.

Reg. Z's Section 32 applies to consumer purpose loans secured by the borrower's primary dwelling with the exception of a RMT, Reverse Mtgs. or Open-end credit plan. The purchase of rental property would not be a consumer purpose loan, therefore exempt from all provisions of Reg. Z.

So a cash out refinance secured by borrower's primary dwelling where proceeds are used for purchase of a 2nd home or investment is exempt from TILA. Therefore, it is also exempt from HOEPA testing and RoR. thanks!

No. Only certain rental property transactions are exempt. A 2nd home definitely would fall within a consumer purpose and be covered by the provisions of Reg. Z. An investment property may or may not fall within a consumer purpose. You would have to apply the 5 factors shown in the OSC to 226.3.