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HMDA Definition: "Satisfies and Replaces"

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According to "A Guide to HMDA Reporting: Getting It Right!" effective 1/1/04, the definition of a reportable refinancing is "any dwelling-secured loan that replaces and satisfies another dwelling-secured loan to the same borrower." Please define "satisfies and replaces." Does this require cancellation of the current loan promissory note and recording of a satisfaction of lien for the current security instrument/mortgage, followed by a new note and execution of a new lien/mortgage? Or does cancellation of the existing note followed by a new note qualify as "refinance" (existing lien instrument/mortgage stays intact)?

The cancellation of an existing note followed by a new note qualifies as a refinance. The existing lien instrument does not have to be satisfied and replaced.

First published on 3/21/05

First published on 03/21/2005

Filed under: 
Filed under lending as: 
Filed under security as: 

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