I have a situation that I have been researching for days but have not offically decided whether or not it meets the definition of refinance under HMDA due to missing information on the HUD and the title search. I did infact send an email to hmdahelp but the only information they gave me was the definition of a refinance--no help I can read that for myself.

My borrower and his parents purchased a 1-4 family residential property at a sheriffs aution that was he claims was originally financed through a credit union. My borrower decided that he wanted to remove his parents from the loan and made the decision to refinance the loan with us. Normally I would see the payoff of the original mortgage on my HUD. This is not the case. The lender did not control the disbursement of the funds and the funds were given directly to the borrower. I have no evidence that (1. A prior obligation existed--the title search did not show a mortgage lein to anyone on this property's address.) (2. That a mortgage was satisfied.)
I have a feeling that the parents had already paid off the mortgage to the credit union and our borrower was paying off his parents. (No evidence)

Can I take the borrower's statement without reference to any available documentation that this is a refinance under HMDA and report it on our LAR?

Sorry I am extremely paranoid. I need to be very careful. OCC was in here in February. HMDA was very ugly do to our commercial loan portfolio on individual's buying investment properties. They would not accept the income we reported on the HMDA LAR as the income we relied upon to make the credit decision. We had to go back a redo our 2005 LAR and gave us four days to fix our 2006 LAR and resubmit it by the deadline. They cited us with a violation of law. I can not afford to have any more mistakes with HMDA or it could mean my job. Any directions/suggestions you may have will be greatly appreciated.

So you have no loan that you're paying off, right?

One of the owners is taking money out and, in essence, buying out the other two?

I definitely do not think this is a refi. It doesn't appear to meet the purpose of purchase or home improvement either. I'd say it's non-reportable.

Now to wait for some of the other HMDA geeks to drop in with their opinions on this.

There is no evidence of any loan on the property at all.

I agree with Truf - there's no evidence that this is reportable.

To answer this question see 4(a)(3)Purpose on page Page D-10 of the GIR.

FWIW we would report this loan as a purchase. The son is purchasing full ownership in the property. Others may argue he already has ownership, and he does have partial ownership. But without "purchasing" the other 2/3 ownership from his parents he can not do anything with that property without their consent nor can they do anything without his.

BTW, you didn't say, but if the property is currently the son's primary residence Reg. Z's ROR will apply.

If you are unsure on which way to report or not to report, and based on your past problems, then pick up the phone and ask your examiner for guidance.

I knew Dan would come through as a purchase on this. We agree on one thing, tho. Call your examiner for the final say.

Thanks so much DAN. Yes this borrower was given the ROR as this is his primary residence. The parent names were never on the deed only his. Am I misunderstanding HMDA? Doesn't a purchase under the HMDA definition mean that the title has to transfer? The title/deed was already in his name.

Your original post indicates (implies), or at least to me it did, the home was bought with the parents. If the parents were not on the deed at all then by no means would this be a purchase, and I would agree that the loan would not be reportable.

Although you can rely on the oral or written statement of the applicant, you also have to rely on the known facts, and in this case you know, by virtue of your title search, there was no existing dwelling secured loan being satisfied and replaced with your loan.

Thanks Everyone! I appreciate your replies. I just love BOL