The purpose of the loan is to purchase a bulk tank and manure spreader and to consolidate two existing loans. One of the existing loans that is being consolidated (refinanced) is secured by a third mortgage on the farm. I believe this loan would need to be reported on the HMDA-LAR as it is considered a refinance since we are refinancing an existing mortgage on the farm. Correct?

If any portion of the loan proceeds meet the definition of a refinancing then it is a refinancing regardless what the remainder of the proceeds are to be used for. Unless of course the remaining proceeds are being used for a home purchase or home improvement.

and as long as the new loan is also secured by a mortgage on a dwelling.

I had a question about this post. If a home purchase loan fell under the farm loan exemption the first time around, and was now being refinanced, would it be HMDA-reportable? I would say yes, based on Dave's HMDA webinar, but the legal area disagrees because under the definition of refi, it says "For coverage purposes, the existing obligation is a home purchase loan (as determined by the lender...)". Legal is saying that if we did not consider the original purchase a home purchase loan, then it isn't a refinance the next time around.

The definition for coverage purposes is to determine whether or not you are a HMDA reporter. You need to look at the definition for reporting purposes, which is: both the existing obligation and the new obligation are secured by liens on dwellings.

I have to disagree with your legal department. Your example would be reportable as a refinance.

Your legal is wrong.

203.2(k)(1) defines a refinancing for the purposes of whether a financial institution is a covered institution and therefore falls under the coverage criteria. See pages 3 and 4 of the GIR.

If the financial institution is a covered institution then they must report their loans according to the definitions of a home purchase loan, home improvement loan or a refinancing. 203.2(k)(2) defines a refinancing for reporting purposes.

If it's not secured by a dwelling then it wouldn't meet the definintion of a refinancing now would it???

I know, I know, it's just usually you add that stuff in there, and you didn't this time, so I thought I would, and then I read your answer more thoroughly...oh, nevermind! :-P

Helium, you deleted your post as I was replying to it. Have your legal review the GIR. The following is from Page C-2.


(iii) In the preceding calendar year, originated at least one home purchase loan (excluding temporary financing such as a construction loan) or refinancing of a home purchase loan, secured by a first lien on a one- to four-family dwelling; and


I also answered the document of statement question. If you apply for a refinance of your home and I don't know if the existing loan is for the purchase I can either request documents from you or I can simply rely on your statement that it was the purchase money loan, therefore since both loans (the old and the new) would be first lien loans my new loan meets the definition of a refinancing for coverage purposes.

Lady in Waiting, would you like me to whop Dan upside the head for being snooty? I can do that you know.

Looks like I missed a few good discussions while I was trying to get some work done today!

I wanted to thank everyone for their feedback. I'm sure everyone would agree that if you are a one-person compliance dept., these forums are priceless.