Business purpose clarification....

Posted By: graygirl

Business purpose clarification.... - 04/16/18 05:47 PM

So a business purpose loan (purchase restaurant equipment) that is secured by a primary residence would ONLY be reportable if a prior loan secured by the residence was satisfied and replaced by the new loan? Making it a true Refinance? I'm reading the FFIEC guide page 268:

Examples—excluded business- or commercial-purpose transactions. The following are
examples of closed-end mortgage loans and open-end lines of credit that are not covered loans
because they primarily are for a business or commercial purpose, but they do not meet the
definition of a home improvement loan under §1003.2(i), a home purchase loan under
§1003.2(j), or a refinancing under §1003.2(p):
Posted By: RR Joker

Re: Business purpose clarification.... - 04/16/18 05:52 PM

Right. You have to satisfy the HMDA purpose test first.
Posted By: David Dickinson

Re: Business purpose clarification.... - 04/16/18 06:04 PM

I agree. Business purpose home equity loans are not reported (only consumer purpose). If either of these is refinanced, then they are reported, but as a "refinance" for HMDA.
Posted By: Debbie

Re: Business purpose clarification.... - 12/11/18 08:15 PM

A business purpose home equity loan would be reportable if the proceeds were to purchase a rent house, right?
Posted By: Adam Witmer

Re: Business purpose clarification.... - 12/11/18 08:29 PM

Yes, it would be reportable as a purchase.