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#713830 - 04/10/07 01:29 PM Purchase/Improvement Not Secured by Dwelling
bgehres Offline
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Joined: Mar 2005
Posts: 126
I have a loan used to purchase and improve a dwelling that is secured by stock. Should I report this loan on our LAR?

My opinion is that since this is a multiple purpose loan, it would be classified as a purchase. However, since it is not secured by a dwelling, it should not be reported.

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#713882 - 04/10/07 02:16 PM Re: Purchase/Improvement Not Secured by Dwelling bgehres
#12 Offline
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Joined: Jun 2005
Posts: 1,338
In order to qualify as a HMDA purchase, the loan also must be secured by a dwelling. I would not report this loan.
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#713944 - 04/10/07 02:58 PM Re: Purchase/Improvement Not Secured by Dwelling #12
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
#12 is right that this does not meet the definition of "purchase" because it is unsecured. However, it MIGHT meet the definition of Home Improvement IF your bank reports all HI loans that are classified as such, regardless of collateral.

If I got a HI loan from your bank that was unsecured, would you report it? If so, I think this loan also needs to be reported as a HI loan. If not, then don't report this loan either.
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#714011 - 04/10/07 03:55 PM Re: Purchase/Improvement Not Secured by Dwelling David Dickinson
bgehres Offline
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Joined: Mar 2005
Posts: 126
Although we do report unsecured HI loans and have a classification for them, this loan was not classified with the rest of the home improvement loans, therefore, I don't think it should be reported.

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#714104 - 04/10/07 05:21 PM Re: Purchase/Improvement Not Secured by Dwelling bgehres
CRAatBOK Offline

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Joined: Mar 2004
Posts: 6,172
Further South than I wanna be.
It doesn't matter whether you classified this loan as one. If you report by classification, the this is a HI loan. YOu can't pick and chose what you are going to report.
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#714403 - 04/11/07 04:34 AM Re: Purchase/Improvement Not Secured by Dwelling CRAatBOK
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
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Central City, NE
I disagree KC. That is true for dwelling secured loans, but not unsecured or non-dwelling secured loans.

203.2(g)(2) defines a HI loan as:
A non-dwelling secured loan that is for the purpose, in whole or in part, of repairing, rehabilitating, remodeling, or improving a dwelling or the real property on which it is located, and that is classified by the financial institution as a home improvement loan.
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#714435 - 04/11/07 01:12 PM Re: Purchase/Improvement Not Secured by Dwelling David Dickinson
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,765
Bloomington, IN
I agree you do not "pick and choose" the loans you report but I do agree with David on the matter of classifying loans.

We no longer classify non-dwelling secured loans as HI. However, when we did if the loan was secured by an auto or CD we classified those loans as an Auto or CD loan and did not report them. And based on the original post the loan was for the purchase of the dwelling in addition to the improvements, therefore if they classified the loan as a purchase then it would not be a reportable loan.
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The opinions expressed are mine and they are not to be taken as legal advice.

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