If we are doing a loan for a customer and on the application the purpose is stated to payoff contract for deed, I say it is a purchase and the loan officer states it is a refinance for HMDA purposes, which is correct?

Depends. Some institutions treat them as purchases while others treat them as refinancings. The key is being consistent in how you report them.

FWIW, we treat them as refinancings. The borrower has already obtained an ownership right to the property via the terms of the contract and the contract is a dwelling secured obligation being replaced by another dwelling secured obligation.

Regardless whether you treat it as a purchase or refinancing for HMDA, it has to be treated as a refinancing for Reg. Z and the ROR will apply.