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#1864670 - 10/24/13 05:10 PM Purchase or Refinance
Wannaknow Offline
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On Sept 3, Applicant A deeds SFR to Applicant B, on September 11, Applicant B applied for a refinance (non-owner occupied) loan to payoff Applicant A's exisiting lender.

Do I have a purchase or a refinance? Applicant B is not refinancing their own loan yet the property is now in Applicant B's name due to a Grant Deed.

I am a bit confused.

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#1864675 - 10/24/13 05:19 PM Re: Purchase or Refinance Wannaknow
raitchjay Online
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OK
Sounds more like a home equity loan than either a purchase or a refinance to me. Are you asking for HMDA purposes?
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#1864704 - 10/24/13 05:46 PM Re: Purchase or Refinance Wannaknow
Wannaknow Offline
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Yes.
I am curious as to why you would lien towards an equity loan??

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#1864709 - 10/24/13 05:57 PM Re: Purchase or Refinance Wannaknow
raitchjay Online
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Well, for HMDA purposes, it doesn't sound like a purchase, as title to the home has already been transferred from Applicant A to Applicant B, prior to your loan. And it doesn't sound like a refinance, as the only loan that will get extinguished is Applicant A's, and he's not a borrower on your loan.

Applicant B's loan with your bank is secured by this home that Applicant A deeded to them? Or Applicant B already has a dwelling-secured loan with your bank that you will refinance with new money to reimburse Applicant A for the deeded house?
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#1864770 - 10/24/13 07:34 PM Re: Purchase or Refinance Wannaknow
rlcarey Online
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Galveston, TX
I am really confused also. How can A transfer title to B when A has an outstanding loan on the property? Sounds like a sale out of trust.
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#1864879 - 10/24/13 09:55 PM Re: Purchase or Refinance Wannaknow
Wannaknow Offline
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Applicant B's loan request with our bank will be secured by the home that Applicant A deeded to Applicant B? The proceeds will go directley to Applicant A's Lender for payoff of Applicant A's mortgage loan (that was previously deeded to Applicant B).

Someone please tell me what I have :-('

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#1864888 - 10/24/13 10:02 PM Re: Purchase or Refinance Wannaknow
rlcarey Online
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I would say it is a purchase. Like I said, how can they legally deed the property to someone else prior to paying off the other loan on it? You better make sure you have clear title on this property.
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#1864889 - 10/24/13 10:04 PM Re: Purchase or Refinance Wannaknow
rlcarey Online
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I would say it is a purchase. Like I said, how can they legally deed the property to B prior to A paying off the other loan on it? You better make sure you have clear title on this property.

Either that, or treat this as a cash-out refinance and it is not reportable.
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#1864903 - 10/24/13 10:42 PM Re: Purchase or Refinance Wannaknow
Wannaknow Offline
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So where would I stand as far as RESPA and Reg Z go?

Applicant A is the daughter and Applicant B is the mother. Daughter was having financial difficulty which is why she deeded the house to her mom. The daughter will continue to live in the house and pay rent (loan payment) when she can.

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#1864914 - 10/24/13 11:08 PM Re: Purchase or Refinance Wannaknow
rlcarey Online
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Consumer purpose secured by 1-4 family dwelling. There is no question on whether RESPA and Reg Z applies.

You never indicated that the daughter (applicant A) was going to be on your loan. It is very difficult to answer these questions without all the facts.
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#1864920 - 10/24/13 11:40 PM Re: Purchase or Refinance Wannaknow
Wannaknow Offline
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The daughter is not going to be on the loan. ONly the mother is on the loan. The mothers new loan (our loan) will pay off the daughters existing loan. (this is weird because the daughter transferred title to the mother in July)but the lender was never notified.

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#1864931 - 10/25/13 12:10 PM Re: Purchase or Refinance Wannaknow
rlcarey Online
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Applicant A is the daughter and Applicant B is the mother.

I was going by this statement so I was confused. So, the question is on your title policy, who does the title insurance company say owns the property at the time of the loan.

If it says the daughter. It is a purchase. If it says the mother, it is non-reportable.

The daughter is lucky that she has not been charged by the other bank for loan fraud by selling the property out of trust.
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