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#910458 - 02/26/08 05:02 PM HMDA applicable?
KTMiteComply Offline
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Here is a scenario that I am not totally 100% sure if it is really HMDA applicable or not. The loan is being done in our Business Loan Dept. The customer is coming in and doing a Cash Out Refinance on an Investment home after renovations have already been done in order for them to take the new equity out and turn around and pay down their Equity Line of Credit that they spent out in the first place to renovate the house or they are just simply replinishing their own working capital. I do not think this is a HMDA applicable issue?? Can anybody please advise? Thanks so much!!!!! Anxiously Awaiting release from the HMDA Dungeon!!
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#910481 - 02/26/08 05:17 PM Re: HMDA applicable? KTMiteComply
hmdagal Offline
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It isn't home improvement because the improvements have already been done. If they are paying down the line and leaving it open it doesn't meet the refi definition. I agree that this isn't reportable.

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#911610 - 02/27/08 07:48 PM Re: HMDA applicable? hmdagal
CRAatBOK Offline

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Question - Is the new loan secured by the Invest. property? was the old loan? Is the new loan a term loan or a line of credit?

I guess I read this as a separate note, not related to the line, except that the proceeds will pay down the line. Also was the line a HELOC as in revolving or closed end line?
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#911772 - 02/27/08 09:45 PM Re: HMDA applicable? CRAatBOK
KTMiteComply Offline
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Yes, the new loan is investment property as well as the old loan. The new loan is a term loan. This is a loan not related to the line of credit and yes the line was a HELOC.
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#911779 - 02/27/08 09:53 PM Re: HMDA applicable? KTMiteComply
Dan Persfull Offline
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If the loan proceeds were used only to pay down the HELOC and did not satisfy and replace the HELOC then I agree with hmdagal, the loan is not reportable.
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#911896 - 02/27/08 11:11 PM Re: HMDA applicable? Dan Persfull
CRAatBOK Offline

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Even if you are taking the investment property as collateral? I guess I don't see that it matters that you are paying down the HELOC because that is a separate transaction. What if he took the money from savings instead of drawing on his HELOC? I think because they are creating a new loan that is secured by the same RE that the first was that it doesn't matter that they didn't pay off the HELOC. We now have a loan that is not a line of credit. Am I way off base here????
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#911902 - 02/27/08 11:23 PM Re: HMDA applicable? CRAatBOK
KTMiteComply Offline
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Originally Posted By: KCGeoQueen
I guess I don't see that it matters that you are paying down the HELOC


Hey KCG - I "think" I'm understanding Dan to say, and I know he will correct me if I am wrong, is that if I were paying off the HELOC entirely with the funds that I refinanced from the loan, then it would be reportable as a refinanced loan, otherwise it is not reportable b/c I didn't satisfy and replace the HELOC. Am I understanding your question right??? I know our brains are on HMDA dungeon food!
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#911989 - 02/28/08 01:33 PM Re: HMDA applicable? KTMiteComply
Dan Persfull Offline
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Bloomington, IN
Quote:
it is not reportable b/c I didn't satisfy and replace the HELOC.


That is correct, your new loan as described did not satisfy and replace an existing dwelling secured loan, therefore it does not meet the definition of a refinancing.
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#912086 - 02/28/08 03:33 PM Re: HMDA applicable? Dan Persfull
hmdagal Offline
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KC, are you thinking that there's another loan that was paid off?

The money all went to reduce the HELOC. If they had originally taken the money from savings instead of drawing on the HELOC, the proceeds from this loan would probably have all gone into the savings account, and it still wouldn't be reportable.

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#912417 - 02/28/08 08:28 PM Re: HMDA applicable? hmdagal
CRAatBOK Offline

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Never mind. I was suffering from CRA/HMDA brain death yesterday. If I only had a Peep I could fully recover.
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