CD Secured - HMDA Reportable?

Purpose-driven or collateral-driven?

A CD secured loan made for the purpose of purchase, refinance, or improvement. HMDA reportable?

This was a hypothetical debate held here this afternoon.

If the stated purpose is for the purchase of 1-4 family residential property, then I say "yes." Efforts should be made to document the address of the property for reporting purposes.

This should be qualified by saying that any loan officer worth his salt would couch his stated purpose in the more ambiguous "for investment purposes" when preparing such a request.

The only way a CD-secured (or any other non-dwelling secured) application can be reportable is if the purpose is home improvement AND the bank internally classifies such applications as "home improvement". Non-dwelling secured purchases or refinances are never reportable.

An application or loan is reported if it falls into one or more of the following three categories: home purchase loan, home improvement loan, or refinancing.

1.A home purchase loan is any loan secured by and made for the purpose of purchasing a dwelling.

2.A home improvement loan is: (a) any dwelling-secured loan to be used, at least in part, for repairing, rehabilitating, remodeling, or improving a dwelling (or the real property on which the dwelling is located); or (b) any loan not secured by a lien on a dwelling to be used, at least in part, for one or more of those purposes that is classified as a home improvement loan by the institution and is used, in whole or in part, for repairing, rehabilitating, remodeling, or improving a dwelling (or the real property on which the dwelling is located).

3.A refinancing is any dwelling-secured loan that replaces and satisfies another dwelling-secured loan to the same borrower. For reporting purposes, both the existing obligation and the new obligation must be secured by liens on dwellings.

That is straight from the HMDA Getting It Right Manual.

Ya'll are just "handier than a pocket on a shirt" for feedback on questions. Thank you!

A nice resource for feedback on banking questions, the Forum is.