Help please..... I believe I know the answer to this but just want to confirm.

We have a lender that is doing a lot loan refinance for a client. Our transaction is specifically for the refi of the lot from another FI. The extra proceeds from our refinance will purchase a modular home to be put on the property in a couple months. Since we do not have any control to what clients do to property outside of our loan closing, but know the intention, would this scenerio be HMDA reportable? A lot loan would not be HMDA reportable, which is what our transaction will be at closing.

Thank you for your help -

Is your loan temporary? If not, it sounds reportable to me as a purchase. The GIR states that you can rely on the statement of the borrower for purpose.

It is not a temporary loan. The question I have is when we close the loan, the mortgage and loan documents will state the lot information only for the refinance. There will be no mention of a purchase of a home. The client just has told the lender the intention of the lot to hold a home in the future, but not now. How could that be considered HMDA reportable?

On a side note, the appraisal in the file is as such that it does list a brief description of a modular home on the lot in the future. So the appraisal is giving a value of the lot and a dwelling for our loan purposes.

This one is confusing to me....

Does your mortgage contain language about future improvements, etc? If it does, i'd report it, because you know they intend to buy a house (and it's not some vague reference to someday buying one evidently)....but i haven't faced this particular scenario either. Maybe someone who has will look at it differently than i am.

I guess i'm looking at it like this: your customer says they will purchase a house, and i'm thinking this loan will be "dwelling-secured" in a couple of months when the manufactured home is moved (and i assume, anchored) to the lot. I guess you could make the other argument too; that it's not "dwelling-secured" as of loan closing. Interesting. But i'd hold to my original opinion i think.

The extra proceeds from our refinance will purchase a modular home to be put on the property in a couple months

This also makes the loan subject to RESPA.


(4) Vacant land. Any loan secured by vacant or unimproved property, unless within two years from the date of the settlement of the loan, a structure or a manufactured home will be constructed or placed on the real property using the loan proceeds. If a loan for a structure or manufactured home to be placed on vacant or unimproved property will be secured by a lien on that property, the transaction is covered by this part.

This is a commercial loan request so RESPA will not apply. What about the HMDA scenerio?

Thank you.

You're permanently financing the purchase/construction of a dwelling. IMO you would report it as a home purchase the same as you would a cost/perm loan.