HMDA - in one sentence

Trying to create training material. KayBee's HMDA material is great. This statement simplifies and is a good opener as long as the final rule makes the statement still true.

All applications, regardless of purpose, would be HMDA reportable if the application is for a loan to be secured by residential real estate.

This is why cash out equity loans and other purposes are now included in the new rule.

Am I correct?

I think that works for consumer purpose loans, but business purpose loans still have to have a purpose of a purchase, refinance, or home improvement loan.

Maybe you could change the statement to say "All consumer applications..."

This ^^^

A residential lot is technically "residential real estate."....specify "dwelling?"

AND, at least here in my shop, some "commercial" lenders label investment/rental property as "commercial real estate." So they think they are excluded from having to think about HMDA.

PreQuals are not reportable, as are some PreApproval requests.

And don't forget about the temporary financing exemption for construction and bridge loans. There are no "blanket statements" when it comes to HMDA.

Nailed it.

Challenge accepted. What about this:

All dwelling secured 1) consumer purpose applications and 2) business purpose applications for the purpose of a purchase, refinance, and home improvement loan would be HMDA reportable unless they are excluded by definition.

Accurate, but without more information, potentially dangerous....at least in my shop.

Then you throw in mixed-use, and the caveat that your people must understand that a mixed-use property whose primary use is commercial is not a "dwelling" for HMDA purposes......

It's dangerous in any shop. I've found that it can take hours to accurately explain what is or what is not HMDA reportable

That's a blanket statement with a lot of caveats...

Yes it is, but it is also a Friday... ;-)

And you probably did not stay in a Holiday Inn Express last night, either!

thanks everyone this helps. For some reason I keep forgetting the business purpose still needs to follow the purchase, refi, HI part of the rule.

How does taking a dwelling as abundance of caution for business purpose count? Does it need to meet the dwelling definition test and the purpose test, as listed above?

yes. ABC is meaningless to HMDA.

Yes.......there are no exceptions for abundance of caution when it comes to HMDA.

Stop that! LOL!

You're too quick for me.

clarify when you say AOC is meaningless.

Business purpose has to be for purchase, HI or refi still so if we aren't doing any of those actions with the dwelling taken as AOC, does HMDA apply?

Busines purpose $500,000 taking inventory or stocks, etc as primary collateral and then a lien on the home they own (personal or investment) free and clear. There is no refi if home is free and clear so would this be HMDA?

And then if they didn't own home free and clear and we took a second lien position, HMDA no?

And then if they didn't own home free and clear but we REFI the 1st lien, HMDA yes?

Busines purpose $500,000 taking inventory or stocks, etc as primary collateral and then a lien on the home they own (personal or investment) free and clear. There is no refi if home is free and clear so would this be HMDA?
No. This is exempt assuming the equity is not use dot purchase, refinance or improve a dwelling. However, if this loan is refinanced, it is reported.

And then if they didn't own home free and clear and we took a second lien position, HMDA no?
This is also not reported. If this loan is refinanced, it is reported.

And then if they didn't own home free and clear but we REFI the 1st lien, HMDA yes?
Yes. Anytime you refinance a home loan, it is reported. Majority purpose/funds never wins when it comes to HMDA.

Anyone have any commercial HMDA training material they are willing to share? Easy to follow and not complicated for the commercial lenders (who seem to make everything more complicated than it has to be).

That part of HMDA hasn't changed.

But yes it has! errrr....unless you mean commercial lenders and their innate ability to complicate things

HMDA for commercial loans has changed- and I am going to be doing some training, so I need to make it as simple as possible. I think I will just use David Dickinson's HMDA flowchart. And then come up with something on the government monitoring to make it easy.

Need a one liner for my commercial lenders. Any loan secured by a dwelling in which the purpose of the loan funds is to purchase, improve, refinance a dwelling is HMDA reportable.

They are going to be all over me when I attempt to talk about multi-family properties (meaning nursing homes/long term care facilities, condo projects, etc).

I really doubt you are going to find a good one liner for commercial loans. You might find the CFPB Transactional Coverage Chart helpful for commercial lenders. Yes, it is a 6 page flow chart, but it gets the job done.

https://s3.amazonaws.com/files.consumerf...al-coverage.pdf

Well, the sentence above won't work. It doesn't include the agricultural exemption and caveats involved that may or may not be excluded depending on total collateral.

And it fails to mention temporary financing exemptions as well.

You might just consider giving a brief overview and tell them to just contact you in the rare instance they actually have one of these properties. I can't imagine most would be able to retain this information until they have to actually use it - which could be several years for some lenders, if ever.

Yes, you may have to tell your commercial lenders that unfortunately, you cannot boil down hundreds of pages of gobbledygook into one sentence.

I think the 6 pages the CFPB got it down to are probably as good as you will get.

Tell them this is the technical word for it. "Gobbledygook."

I love that word....and it's quite apt here.

Quite apt everywhere! Should also tell them HMDA stands for Hate My Day Already.

BAH HMDA

I like it! I made it into a meme: https://imgflip.com/i/202hqn Perfect for this month - it's now hanging on my office door.

HAHA! That's a good one, Jim!

Love it!