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#1998960 - 02/27/15 09:05 PM Purchasing new primary sec'd by existing primary
CRL Offline
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CRL
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This is somewhat like a bridge loan, but borrower requested 30 year mtg on existing OO SFR, that is owned free and clear. Borrower is purchasing new OO SFR, with the funds. Will payoff the loan when existing SFR is sold.

Loan request was withdrawn. Because this was not a short term loan, should it be reported? And if so, I would think it should be coded as a purchase, reporting the existing SFR address, and coded as OO or NOO?
Last edited by CRL; 02/27/15 09:05 PM.
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#1998978 - 02/27/15 09:19 PM Re: Purchasing new primary sec'd by existing primary CRL
Dan Persfull Offline
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Bloomington, IN
It meets the definition of a home purchase and you would report the property information for the property that would have secured the loan.

A 30 year term loan IMO could never be considered a bridge loan.
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#1999011 - 02/27/15 10:03 PM Re: Purchasing new primary sec'd by existing primary CRL
CRL Offline
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Dan, you've been my hero today! Thank you! I agree, since we don't offer bridge loans, we were trying to accommodate a good borrower, so despite intent, it was going to be a 30 year loan. So report as purchase, report address loan is secured by, and occupancy as OO, since that is technically until he purchases the new home? That was the one I was less sure about.
Last edited by CRL; 02/27/15 10:03 PM.
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#1999016 - 02/27/15 10:07 PM Re: Purchasing new primary sec'd by existing primary CRL
Dan Persfull Offline
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report as purchase, report address loan is secured by, and occupancy as OO,

Correct.
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#1999178 - 03/02/15 05:29 PM Re: Purchasing new primary sec'd by existing primary CRL
Happy Birthday David Dickinson Offline
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I agree with Dan. This is not gap financing. They obviously didn't want temporary financing by requesting a 30 year term. Therefore, this appears to be an inaccurate statement: "Will payoff the loan when existing SFR is sold."

Had they requested a shorter term (say 6 months), I would say it is a bridge loan (the gap financing between the purchase of the new and the sale of the old).
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#1999222 - 03/02/15 07:17 PM Re: Purchasing new primary sec'd by existing primary CRL
RR Joker Offline
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I'd like to take this one step further and assume this loan originated. Would you then report it as NOO? Seems like the answer to either should be consistent...that's why I ask! smile
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#1999237 - 03/02/15 07:41 PM Re: Purchasing new primary sec'd by existing primary CRL
Happy Birthday David Dickinson Offline
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It sounds to me (but I'm assuming), they intend to move into the new home once it's purchased. They're just using the current dwelling as collateral. If so, the home would be Owner Occupied. If they don't, then it would be Non-owner Occupied.
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#1999244 - 03/02/15 07:50 PM Re: Purchasing new primary sec'd by existing primary CRL
RR Joker Offline
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Okay, now I'm more confused.

The intent was to purchase a new home secured by the 'old' PR. Wouldn't either case (withdrawn or orignated) (intent wise) be NOO on the security?

David, perhaps I'm not following your last two sentences. At best, The way I read it, it's backwards?
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#1999246 - 03/02/15 07:53 PM Re: Purchasing new primary sec'd by existing primary CRL
Dan Persfull Offline
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Bloomington, IN
OK, maybe I'm not understanding here.

Whether they end up moving into the new home as their primary residence is not a factor in the owner occupancy to be reported for this loan.

The loan is to purchase the new home and will be secured by the borrower's current primary residence. At the time the loan is made the residence will be owner-occupied. The fact they may vacate the home after the fact would not IMO make the home securing the loan non owner occupied. And how would them moving or not moving into the new home affect the occupancy status of the current home which is securing the loan?

Am I missing something. If both homes secured the loan then I might see the discussion of occupancy for the property being purchased because in those cases the GIR states you should report the status of the property being purchased.
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#1999251 - 03/02/15 08:12 PM Re: Purchasing new primary sec'd by existing primary CRL
RR Joker Offline
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The Swamp
Okay...now THAT I can comprehend and agree to the logic with.
Last edited by RR Joker; 03/02/15 08:12 PM.
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#1999327 - 03/02/15 10:41 PM Re: Purchasing new primary sec'd by existing primary CRL
Happy Birthday David Dickinson Offline
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Central City, NE
You're right. Sorry for the confusion I caused. I was thinking that the new home secured the loan as well.
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