Dad has a loan on property that's been deeded to 4 kids. We are now doing a loan for kid #2 paying Dad's loan off, and the other 3 are deeding him their interests for $0 because he's assuming the debt on the property.

He already has 1/4 ownership in the property, so I don't see calling this a purchase, but what TRID purpose fits? Equity, maybe? I hesitate to call it refi since the existing debt isn't in Kid #2's name.

funky one for a Friday, Becca.
I think I'd go with refi because the son is on title already.
I don't think making this call is as earth shattering under TRID as it would be under HMDA.
Speaking of which, what ARE you going to call it under HMDA?
Being consistent would at least make it easier to 'discuss' with an examiner.

Can't be a refi because it doesn't fit the definition they require you to use:

a) Refinancings. A refinancing occurs when an existing obligation that was subject to this subpart is satisfied and replaced by a new obligation undertaken by the same consumer

I"m not calling it anything under HMDA - there isn't a house!

Page 14 of the of the CFPB TILA-RESPA Disclosure Guide reads as follows:



Says nothing about 'same consumer' there.

I'm with Joker on this one - the reg clearly references the refi definition in 1026.20(a), and that says "by the same consumer."

So I think we're all agreeing that it is not a purchase, and if it also doesn't meet the definition of refi that defaults it into Equity land, right?

For anyone else reading this later - here are the reg cites:
1026.37(a)
(9) Purpose. The consumer's intended use for the credit, labeled “Purpose,” using one of the following terms:
...
(ii) Refinance. If the credit is not for the purpose described in paragraph (a)(9)(i) of this section, and if the credit will be used to refinance an existing obligation, as defined in § 1026.20(a) (but without regard to whether the creditor is the original creditor or a holder or servicer of the original obligation), that is secured by the property identified in paragraph (a)(6) of this section, the creditor shall disclose that the loan is for a “Refinance.”


and 1026.20:
(a) Refinancings. A refinancing occurs when an existing obligation that was subject to this subpart is satisfied and replaced by a new obligation undertaken by the same consumer.

I'm still not completely ruling purchase out.

I mean it 'could' be a purchase, as he is purchasing everyone's equity portion...even if it's for the payoff of the debt and even if he already has a limited ownership interest.

Since they are getting $0 back get them to deed the property before the loan transaction takes place. If the deed is being transferred as part of the loan transaction then I'm with RRJ. They are transferring (selling) their ownership for the payoff of the loan and IMO be the sales price would be the pay off..

Well, here's the definition of "purchase" from 1026.37(a)(9):

(i) Purchase. If the credit is to finance the acquisition of the property identified in paragraph (a)(6) of this section, the creditor shall disclose that the loan is for a “Purchase.”



Does going from a 25% ownership to 100% count as "acquiring" the property?

Does going from a 25% ownership to 100% count as "acquiring" the property?

IMO, yes. Without acquiring the other 75% in the property his 25% ownership is basically useless without the consent of the other 75% ownership.

Sounds reasonable to me. Thanks!