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#2281685 - 02/28/23 07:04 PM Phase II Financing - Purchase or Refi
Believing... Offline
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Joined: Apr 2012
Posts: 346
In the mountains
We are converting a temporary home purchase to perm financing. Do we follow the same rules as if this were a construction loan and report the perm phase as a home purchase loan? Similarly, we are refinancing/converting an open-end LOC that was for the purpose of acquiring investment properties into a closed-end loan. The bank does not meet the threshold for reporting LOCs, so the original line was not reported. I really don't look at this as phase II financing since the borrower could have maintained the LOC for a longer time. Should this one be reported as a refi?

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#2281688 - 02/28/23 07:20 PM Re: Phase II Financing - Purchase or Refi Believing...
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Converting? You mean via a modification? Modifications are not reportable under HMDA.
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#2281689 - 02/28/23 07:20 PM Re: Phase II Financing - Purchase or Refi Believing...
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
converting a temporary home purchase to perm financing. Not a const/perm loan. This would be a refinancing.

The fact you do not meet the threshold for reporting HELOCs has no bearing if the closed-end loan is covered. You are satisfying and replacing an existing dwelling secured loan (assuming the "investment" properties are dwellings) with assumably a new dwelling secured loan and to the same borrower. This would be a refinancing.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2281694 - 02/28/23 07:34 PM Re: Phase II Financing - Purchase or Refi Believing...
Believing... Offline
Gold Star
Joined: Apr 2012
Posts: 346
In the mountains
No mods; my weird use of the term converting. We are refinancing both. Thanks, Dan!

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