Does anyone recall ever seeing an exemption from HMDA reporting for loans purchased on the secondary market? If the funding institution reports and later sells the loan must the purchasing institution also report?

Take a look at the HMDA guide: HMDA Getting It Right. The exemptions as they relate to purchasing loans are: if it is the purchase of an interest in a pool of loans or simply the purchase of the right to service the loans, you have get the exemption.

Appendix A has a discussion on what codes you should enter on your LAR. For example, you enter "0" "if you orginated or purchased a loan and did not sell it during that same year..." These items are also discussed in Appendix D - the Staff Commentary.

You can find this guide on the FFIEC web site. Hope that helps!