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#398304 - 08/08/05 08:53 PM HMDA Use of Proceeds - Purchase or Refinance?
bgehres Offline
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Joined: Mar 2005
Posts: 126
If a customer buys a rental property using a HELOC and then applies for a loan to pay down the HELOC secured by the rental property, what would this by classified as for HMDA?

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Lending Compliance
#398305 - 08/08/05 09:05 PM Re: HMDA Use of Proceeds - Purchase or Refinance?
Anonymous
Unregistered

A refinance since there is a dwelling on both sides of the transaction.

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#398306 - 08/08/05 09:08 PM Re: HMDA Use of Proceeds - Purchase or Refinance?
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,422
Bloomington, IN
Quote:

to pay down the HELOC




This loan is not reportable. It does not meet the definition of a refinance.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#398307 - 08/09/05 02:02 PM Re: HMDA Use of Proceeds - Purchase or Refinance?
bgehres Offline
100 Club
Joined: Mar 2005
Posts: 126
Since the HELOC line is on the person's primary residence, you wouldn't pay off the HELOC, so therefore, I agree it wouldn't be a refinance, but in essence, they are using the funds to purchase the property, just no directly through that transaction. Does this matter?

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#398308 - 08/09/05 02:23 PM Re: HMDA Use of Proceeds - Purchase or Refinance?
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,422
Bloomington, IN
The proceeds of this loan are not being used to purchase a property - they are being used to pay down a line of credit which was used to purchase the property.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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