Is HELOC Really for Home Improvement?

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Question:

When a HELOC applicant indicates only a home improvement purpose on the application and there are no liens on the property, can we really presume the whole amount is to be used for home improvement or do we have to specifically ask?

Answer:

If you are referring to what you should report for HMDA purposes, you only report the initial portion that is to be used for home improvement. You don't assume anything.

First published on BankersOnline.com 11/22/10