Should GMI be collected on a primary residence refinance when additional money is added to the mortgage amount?
One of our branches made a multiple advance consumer purpose loan to purchase and renovate an existing home that the borrowers will move into after renovation. At the time the loan was made, the branch had (and still has) a commitment letter for permanent financing from another lender. Per HMDA guidance "The regulation lists as examples of temporary financing construction loans and bridge loans. See 203.4(d)(3). Construction and bridge loans are illustrative, not exclusive, examples of temporary financing. The examples indicate that financing is temporary if it is designed to be replaced by permanent financing of a much longer term. A loan is not temporary financing merely because its term is short. For example, a lender may make a loan with a one year term to enable an investor to purchase a home, renovate it and resell it before the term expires. Such a loan must be reported as a home purchase loan. See 203.2(h)." Therefore, because of that outside commitment letter, we determined that it was not HMDA reportable. However, since it is a loan to purchase an existing dwelling that will be occupied by the applicant as a primary dwelling, is monitoring information required under Reg B? I have been told that for monitoring purposes, we have two tests to fulfill, the HMDA test and the Reg B test. We already know this is temporary under HMDA and not HMDA reportable, but I'm not sure if I need monitoring information under Reg B. Specifically, 12 CFR 202.13 states that a bank must get monitoring information for dwelling purchase loans or refinancing of a purchase money loans. It appears, based on what I have been told before, that only the initial construction of a home is exempt under Reg B for monitoring purposes. From past training, I seem to recall that other temporary loans, such as bridge loans and the loan in question, are still covered by the monitoring information requirements of Reg B since they are to purchase an existing dwelling. Is that correct or can I use the same temporary financing test for HMDA and Reg B?
During a face-to-face loan application interview, does the borrower have to complete the government monitoring information in their own handwriting? In most cases, applications are being originated on loan origination software. Is it acceptable for the originator/lender to orally state the GMI statement to the borrower and input the borrower's response so it displays on the application document in typewritten form?
This is in regards to reporting Government Monitoring Information. We are a wholesale lender and when we receive a file from a broker we enter the application information into our originating system. On a telephone or mailed application, there will be times when the broker checks the box "I do not wish to furnish this information" and the box "male." We enter that same information into our system. However, when we pull our LAR, "info not provided" is what appears (not that male was checked). This only happens on telephone and mailed applications. On face to face applications, all the boxes that are checked transfer over to the LAR. The originating and HMDA reporting software is widely used in the industry. When I asked them about this issue, I was told it's because when a borrower checks the box "I do not wish to furnish this information" (on a telephone or mailed application), the other information is not required to be collected so it is not reported on the LAR. Our bank examiner does not agree with this and says we are required to report everything that is on the application (even on a telephone or mailed application). Who's right?
What are the required disclosures for declined loans and what are we required to keep in the file for audit purposes on declined loans?
I have a loan and the purpose is to finance the remainder of the purchase price of a primary residence with the collateral of the loan being the existing home. This is a six month single pay loan. Do I need to collect government monitoring on this loan?
If an applicant provides government monitoring information that is clearly incorrect, should it be corrected by the loan officer taking the application?
If a bank has elected not to report HELOC's under HMDA then you do not have to collect the borrower's race, sex or ethnicity. What if a borrower completes an application and marks this information as it pertains to them, does it matter that you have this information in your loan file even though it is not required?
We have a loan request to purchase a residence that will be the primary residence for one borrower but there is a co-borrower that will not occupy the home. Do we collect government monitoring information for all borrowers or just the borrower that will occupy it as their primary residence?
This question is regarding Reg B and HMDA, are there any instances when the ethnicity, race, and sex information should be collected for Reg B purposes, but not HMDA purposes (for instance, lines of credit with a primary purpose of purchasing or refinancing a principal dwelling)? Is it okay to collect the government monitoring information in these cases even if the loan is not HMDA applicable?