HELOCs - HMDA Reporting

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Question:

Our bank will be reporting Home Equity Lines of Credits for HMDA. Although we are not certain what the guidelines are for the loan amount, we understand we have to report only the amount intended for home improvements. For example, do we use the amount they draw at closing? Please clarify how to determine what amount to use.

Answer:

Home equity lines of credit (HELOCs) for home purchase or improvement may be reported at the institution's option. Report only the amount that is intended for home purchase or home improvement purposes. An institution that reports home equity credit line originations must also report any applications that do not result in an origination.

For purchases, it most likely would be the initial draw. If the line was going to be used for home improvement, it may go beyond the initial draw amount. It depends on what the customer tells you.

First published on BankersOnline.com 3/22/10