I have a customer that orginally had a loan that was for Business Purpose: purchase equipment. It was secured by a separate security agreement that specifically listed their 1998 mobile home. This loan has been refinanced (old loan paid off and replaced with new) to become interest only payments (customer is having cash flow problems due to slow down in business). The new loan is for 6 months and will be refinanced into a regular pay loan after this. I feel that this is a "bridge" loan and therefore temporary financing and not reportable. Anyone disagree? agree? Or should it be considered a refinance now and reportable now and reportable again later when it refinances again? HELP!!

Sounds temp to me too since it will be repaid from other permanent financing...

Since you plan to replace this loan with a new loan in 6 months, I would not report this loan. I believe the intent of HMDA is to not double report. I agree that this is not a construction or bridge loan, but the revised FFIEC Q&A's state those are "illustrative, not exclusive examples of temporary financing".

David-

What's your opinion on spec homes? I/O 12 months loans to a builder to construct & sell a single family residence. Our external auditor is saying that these loans are now reportable because they are no longer "temp" loans.

The initial loan for a spec house should still fall under the construction loan exemption. However, if the house does not sell and you have to refinance it then it will fall within the reporting requirements.

Yes, agree with Dan's explanation. Construction only loans continue to be exempt.

GG...I agree with the above folks, exempt.

I hope your auditors are not looking just at timeframe as their only consideration to determine if a loan is temp or not. Purpose and intent are just as important in that determination. A temp loan can be over a year in length, especially in some of these builder specs situations in this softening real esate market where they might not be turing over as quickly as they once did.

I agree with Dan, Joker and bbsgrant. A construction is not to be reported [see §203.4(d)(3)]. A speculation home is a construction loan, and therefore exempt.