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Borrower Does Not Own Subject Property (HMDA)

Answered by: 
Randy Carey
Kathleen Blanchard

Question: 
My question is in the area of HMDA reporting. An application for a refinance (replenish reserves and capital) on a multi-family residence with the subject property having a existing lien was received, reviewed and denied. The only reason for denial was that the borrower did not own the subject property. Per "HMDA Reporting Getting It Right!," I believe we should report the loan as a refinance since there is an existing lien. With this scenario of having a borrower that does not own the subject property, I would like to verify if it is reportable and how?
Answer: 

Answer by Randy Carey: If they were not going to actually pay-off the existing lien, then it would not be reportable. If they were going to pay off the existing lien as part of the loan transaction, it would be a refinance. Ownership of the property is not a determining factor.

Answer: 

Answer by Kathleen Blanchard: You also need to make certain at least one borrower is the same on the prior loan and the denied request.

First published on 02/12/2017

Filed under: 
Lending
Filed under lending as: 
HMDA

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