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#959112 - 05/14/08 06:29 PM purpose - purchase home w/other bank
complyorelse Offline
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We have a loan secured by a mobile home and several acres where the borrower used the funds as a down payment for the purchase of another home through another bank. They had no previous mortgage so it would not be a refi and we won't have a mortgage on the new property. Is this HMDA reportable on our end?

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#959122 - 05/14/08 06:36 PM Re: purpose - purchase home w/other bank complyorelse
GuitarDude Offline
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I believe you would have a reportable purchase. The loan may not be secured by the intended primary dwelling, but it sounds like it will be secured by a dwelling and the funds are for the purchase of a dwelling.
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#959157 - 05/14/08 07:02 PM Re: purpose - purchase home w/other bank GuitarDude
Dan Persfull Offline
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I agree. It's a home purchase.
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#959181 - 05/14/08 07:23 PM Re: purpose - purchase home w/other bank Dan Persfull
complyorelse Offline
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Is it possible this could be considered a temporary loan (bridge) since our collateral is for sale and the proceeds will be used to pay our loan off?

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#959198 - 05/14/08 07:34 PM Re: purpose - purchase home w/other bank complyorelse
Dan Persfull Offline
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That fact was not mentioned in your original post. Bridge loans are exempt from HMDA reporting.
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#959210 - 05/14/08 07:44 PM Re: purpose - purchase home w/other bank Dan Persfull
complyorelse Offline
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I apologize. I didn't want to confuse matters and bridge loans are so unclear all on their own. Is it the mere fact that our collateral is for sale that makes it a bridge loan then?

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#959272 - 05/14/08 09:12 PM Re: purpose - purchase home w/other bank complyorelse
Mrs. Rizzo Offline
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Curled up by the fire...
What are the terms of repayment on your note?
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#959286 - 05/14/08 09:45 PM Re: purpose - purchase home w/other bank Mrs. Rizzo
GuitarDude Offline
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The collateral being for sale, just like the term of the loan, is a factor in determining whether you have a bridge or temporary loan, but not the only factor IMHO. To me, the repayment of the loan carries more weight. Generally a temporary or bridge loan is one that is intended to be replaced with permanent long-term financing.

In fact, the HMDA FAQ states that a spec home that is to be repaid with the funds from the sale of the property is a reportable purchase loan. FAQ on Temporary Financing.
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#959405 - 05/15/08 12:56 PM Re: purpose - purchase home w/other bank GuitarDude
Dan Persfull Offline
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The FAQ speaks to purchasing a home, renovating it and then selling it, a "splash and dash" loan. Those are reportable home purchase loans. The first sentence of that FAQ also specifically exempt bridge and construction loans as temporary loans.

Not all bridge loans are intended to be replaced with longer term financing. Most bridge loans are separate loans taken on the equity of the borrower's existing residence in order for them to have the downpayment to secure permanent financing on their new residence and the bridge loan is generally paid from the sale of the existing residence.

I will stand by my response that complyorelse has an exempt bridge loan regardless if the loan will be paid from a refinancing or the sell of the existing residence.
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