DEED IN LIEU OF FORECLOSURE

Posted By: JSD

DEED IN LIEU OF FORECLOSURE - 08/06/14 07:07 PM

Wanted to check with others to see how you handle the following: A loan has been made and the clients resided in the property. It goes into to foreclosure and no one bids on property so the bank buys the property. So the loan has been cancelled and the bank takes the real estate. Same process if customer gives us the deed in lieu of foreclosure. Would these be a HMDA reportable transaction? We understand and do report repurchases, but don't feel these situations fall into that category. Thanks!
Posted By: Kathleen O. Blanchard

Re: DEED IN LIEU OF FORECLOSURE - 08/06/14 07:13 PM

No these are not reportable transactions. No loan is being made/changing hands. The property is changing hands but the loan is not. If you sell the property and finance that transaction, that of course will be reportable as a new loan.
Posted By: JSD

Re: DEED IN LIEU OF FORECLOSURE - 08/06/14 07:22 PM

Thanks and it did not appear to fit a purpose, but there was allot of energy around it being a repurchase, but felt that was not correct!
Love BOL - thanks!
Posted By: Kathleen O. Blanchard

Re: DEED IN LIEU OF FORECLOSURE - 08/06/14 07:29 PM

No money changed hands. The bank did not buy it back from the customer. In a repurchase, funds change hands with the institution from which the bank buys the loan back.