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#482225 - 01/21/06 01:32 PM
Re: HMDA Temporary Financing Cave In
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100 Club
Joined: Mar 2005
Posts: 126
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I was told by our regulator that any loan made where the primary source of repayment is the sale of the property can not be considered temporary financing, including construction loans.
I don't agree with them, but that doesn't really matter.
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#482228 - 02/01/06 07:22 PM
Re: HMDA Temporary Financing Cave In
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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Just quickly, I spoke with our FED examiner a few minutes ago after Becca pointed me to this uproar...he said contruction and bridge loans were fine...but where we used to consider purchasing a home on a single-pay note, source of repayment resale...no longer would qualify. He said we will not be required to redo for 2005...and he recommended flagging our temps beginning 1-1-06 in case all the uproar causes a restatement of the answer and we end up needing to delete them. I did not request this in writing tho..sorry...Just thought you might want to hear something from an authority actually at the FED.
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#482229 - 02/03/06 05:25 PM
Re: HMDA Temporary Financing Cave In
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100 Club
Joined: Mar 2005
Posts: 126
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So according to your contact at the FED, is a loan used to construct a dwelling for resale fall under the "temporary financing" exemption?
Last edited by bgehres; 02/03/06 05:25 PM.
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#482230 - 02/06/06 06:10 PM
Re: HMDA Temporary Financing Cave In
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Power Poster
Joined: Mar 2004
Posts: 6,172
Further South than I wanna be.
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Boy your examiners are nicer than mine. I had to go back and hunt all mine for 2005 and add them. I couldn't get anything in writing either, and I asked.
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Life is not the way it's supposed to be. It's the way it is. The way you cope with it is what makes the difference.
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#482231 - 02/10/06 04:46 PM
Re: HMDA Temporary Financing Cave In
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10K Club
Joined: Aug 2002
Posts: 47,748
Bloomington, IN
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I spoke with my contact from the FDIC Chicago Regional Office yesterday. It looks like we will have to follow the FAQ posted on the FFIEC site.
He did say they are working on a new SCANS bulletin that will address the issue and they are also going to try to address a few of the questions that have been posted here. As soon as it is released (which will be a few weeks probably) I will share its content.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#482232 - 02/10/06 04:52 PM
Re: HMDA Temporary Financing Cave In
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10K Club
Joined: Jul 2001
Posts: 84,680
Galveston, TX
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Great - just what we need is more regional interpretations.
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#482233 - 02/10/06 04:53 PM
Re: HMDA Temporary Financing Cave In
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Power Poster
Joined: Apr 2001
Posts: 4,828
Between the lines
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I do not have to go back through the 2005 loans either - OCC. Flagging in 2006 is a good idea though.
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#482236 - 02/14/06 05:43 PM
Re: HMDA Temporary Financing Cave In
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Power Poster
Joined: Nov 2003
Posts: 3,738
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Quote:
Quote:
So according to your contact at the FED, is a loan used to construct a dwelling for resale fall under the "temporary financing" exemption?
Yes.
Wouldn't this be 'no"?
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#482238 - 02/14/06 07:19 PM
Re: HMDA Temporary Financing Cave In
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Power Poster
Joined: Nov 2003
Posts: 3,738
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Quote:
Quote:
Quote:
Quote:
So according to your contact at the FED, is a loan used to construct a dwelling for resale fall under the "temporary financing" exemption?
Yes.
Wouldn't this be 'no"?
No..it would be "yes"..temporary financing exemption:construction loans.
I have a huge feeling this "hurried" Q&A answer will be revisted...it's causing way too much conflict and will go nowhere towards uniform reporting.
I agree, because I am completely confused now. In the example given, the source of repayment is the proceeds from the sale of the newly constructed house not permanent financing, right? I thought if the source of repayment for a loan was anything other than permanent financing - you had to report it. Isn't that what all the confusion is about?
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#482239 - 02/14/06 07:34 PM
Re: HMDA Temporary Financing Cave In
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Power Poster
Joined: Apr 2005
Posts: 3,663
TN
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I don't believe the initial construction loan would. I say this because construction loans are specifically mentioned as temporary financing in the Q&A.
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I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.
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#482241 - 02/14/06 08:11 PM
Re: HMDA Temporary Financing Cave In
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10K Club
Joined: Nov 2000
Posts: 18,765
Central City, NE
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Quote:
So according to your contact at the FED, is a loan used to construct a dwelling for resale fall under the "temporary financing" exemption?
I agree this is still exempt. This is what I call a "spec. house loan". This is NOT the same as a "splash and dash" or "rehab" loan. Those are purchases and the new FAQ makes it clear they are to be reported because they aren't construction loans. A Spec. House loan is a construction loan and clearly (at least to me ) meets the exemption.
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#482244 - 02/15/06 01:48 PM
Re: HMDA Temporary Financing Cave In
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10K Club
Joined: Aug 2002
Posts: 47,748
Bloomington, IN
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Things that make you go hmmmmmm. . . . . .
Federal Register / Vol. 67, No. 32 / Friday, February 15, 2002 / Rules and Regulations Page 7231
Temporary Financing Regulation C generally does not permit lenders to report temporary financing. The Board has not amended these rules. The Board believes that, although in some cases the data would not be duplicative—such as where a lender originates construction loans but does not offer permanent financing these instances appear to be relatively few. Time Period. The Board requested comment on whether the regulation should define ‘‘temporary loans’’ in terms of a time period. A few financial institutions requested a definition that includes a specific time period. Upon further analysis, however, the Board believes that in the absence of any generally accepted time frame for ‘‘temporary financing,’’ it is impracticable to provide a ‘‘bright-line’’ test. Instead, the regulation will continue to offer examples, such as construction financing.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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#482245 - 02/17/06 12:54 PM
Re: HMDA Temporary Financing Cave In
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100 Club
Joined: Mar 2005
Posts: 126
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Quote:
FWIW, our regulator (KC FDIC) agrees with David. They said a loan to construct a home & sell it (spec home) is construction & therefore not reportable. A loan to purchase, fix up & sell a dwelling (splash & dash) is reportable.
That’s exactly the opposite interpretation that I received from our fed office. I’m glad to see all the regulators are on the same page with this.
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#482248 - 02/17/06 03:20 PM
Re: HMDA Temporary Financing Cave In
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Diamond Poster
Joined: Mar 2003
Posts: 1,035
OK
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Our FDIC contact in Oklahoma City which covers the Dallas Region said that a construction loan to construct a personal residence, a spec home, or a custom home does fall under the temporary financing exclusion. He also said that we were to report home purchases that are investment properties to be resold (whether improvements were made or not). FWIW - he also said that we were still to exempt bridge loans and we could use whatever our bank defines as a bridge loan.
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