Renewal of Commercial LOC - Addtional Collateral

Renewal of business LOC securred by the assets of the business. Collateral value does not cover LOC so second mortgage/lien position is taken on the guarantor's primary residence. Would this be HMDA reportable?

First of all, if your bank does not report revolving lines of credit like HELOCs, business lines of credit will not be reported either.

Secondly, if revolving lines are reported, this would not be reported because you are just now taking the residential real estate. At the next renewal, if the residential real estate is again securing the line, it would be reportable as a renewal.

Ok...what if we are terming the LOC? Not enough collateral so second lien position is taken on guarantor's primary residence? Would this be HMDA reportable? Is there a distinction if it is a LOC or a term loan with regards to being HMDA reportable?

I am having difficulties on this as I don't see this as a purchase, refinance, or home improvement.

If you do not report revolving lines, business revolving lines are not reportable.

Term loans are reportable if they otherwise meet HMDA reporting requirements.

To be reported as a refinance for HMDA, the loan being refinanced and the new loan must be to the same borrower and must both be secured by residential real estate (does not have to be the same property). Your original loan was not secured by residential real estate.