Re-Write of Loan a Refinance or Purchase?

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Question:

An Initial loan is a multiple advance temporary loan for the purchase of a home $50,000 plus $25,000 Straight Line of Credit to improve the home. The first loan is not HMDA reportable due to temporary. Is the re-write of that loan a refinance (since the new loan satisfies and replaces the first) or is it a purchase (as a construction loan would be a purchase since it is not on the LAR yet?)

Answer:

We treat these the same as we do our 2 phase construction permanent loans. We do not report the construction phase but report it as a home purchase when converted to the permanent phase.

In the case of a 2 phase home purchase plus renovations we don't report the renovation phase but report the permanent phase as a home purchase.

First published on BankersOnline.com 5/14/12