HMDA Reporting - Reverse Mortgages

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Question:

Are reverse mortgages HMDA reportable? For example, a qualified borrower owns a home free and clear with a reverse mortgage loan taken out based on equity in the home. Second example, a qualified borrower has an existing mortgage balance on the primary residence and a reverse mortgage loan is taken based on equity in the home and part of the loan is used to payoff existing mortgage where borrower receives the remainder of the loan.

Answer:

From the Q&A on the FFIEC Web's site:

Reverse Mortgage---reporting. Does a lender have to report information on applications and loans involving reverse mortgages?

Answer: Reverse mortgages are subject to the general rule that lenders must report applications or loans that meet the definition of a home purchase loan, home improvement loan, or refinancing (see 12 C.F.R. Section 203.2(g)-(h), (k)).

Note, however, that reporting is optional if the reverse mortgage (in addition to qualifying as a home purchase loan, home improvement loan or refinancing) is also a home equity line of credit (HELOC). See 12 C.F.R. Section 203.4(c)(3). The official staff commentary to Reg C states that a lender who opts to report a HELOC should report in the loan amount field only the portion of the line intended for home improvement or home purchase. See comment 4(a)(7)-3.

First published on BankersOnline.com 10/01/07