Home Equity Refinance Subject to HMDA Reporting?

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Question:

In this week's "Weekly Banker Brief," the following QandA appeared: <a href="http://www.bankersonline.com/lending/guru2011/gurus_ldng100311c.html">Cash Out Refi of Investment Property-HMDA?</a> <em>Question: A borrower is getting a cash out refi of investment property. The money is to reimburse their reserves after they bought a house with cash. Is this a HMDA loan? 1 Answer: No. This loan doesn't purchase or improve the dwelling. It also isn't a refinancing. It is a home equity loan that is not subject to HMDA. 2 Answer: I agree, not HMDA but I would contend this loan is subject to TIL and RESPA based on the information provided. It is not for the acquisition, improvement or maintenance of a non-owner occupied rental property and the purpose as stated appears to be for a personal, family or household purpose which would make it a consumer purpose loan.</em> I think that I need a little clarification. I thought that only HELOC loans that are refinancing are not subject to HMDA reporting. If this is a closed-end home equity refinance, wouldn't it be HMDA reportable?

Answer:

To be reported as a refinance for HMDA purposes, a loan must be dwelling secured and replace a dwelling secured loan to the same borrower. In the example stated, there is no prior dwelling secured loan to be repaid. The borrowers purchased the dwelling for cash.

First published on BankersOnline.com 10/24/11