Situation: We are taking out another bank's loan for which the purpose was to purchase vacant land. Our lender is calling this a refinance of the other bank's loan. The collateral will be the primary residence. I am thinking that we do not care what the original purpose was--we are "originating" a refinance of the home for which the proceeds will be to pay off other debt. Still not HMDA reportable, but taking another thought process. I believe that the lender should not be thinking "refinance" or original purpose because we are not refinancing our loan, instead the thought process should be our origination and the purpose for those funds. Your thoughts?

HMDA argggghhhh!!

If I am understanding what you are stating...if the loan is for vacant land and there is no residence then it is not HMDA reportable. You stated: "we are "originating" a refinance of the home for which the proceeds will be to pay off other debt." My thoughts are that if you are taking a loan that is already in the loan system, refinancing it and adding new money to the balance....(whether from your bank or another bank) you are renewing the note and adding additional funds. We view that as a renewal/increase type loan. So in other words you could say it is a refinance. However, are loan coding system doesn't give us codes for new loans vs renewals.

One more item. However, if the property does have a residence as you stated and the loan was for the purpose of purchasing, refinancing a residence or to improve a residence then you could claim it as a HMDA reportable because the purchase money is being refinanced. Sorry I didn't finish the thought process on the first response.

If the purchase of the vacant land was secured by a lien in the residence, and you are “refinancing” the residence to pay off that loan and securing your loan by the dwelling, I would report it as a refinance. HMDA gives you this option when the new loan will be secured by lien in a dwelling.

From the GIR – Code 3: Refinancing.

c. You may report all refinancings of loans secured by one-to-four-family residential dwellings, regardless of the purpose of or amount outstanding on the original loan, and regardless of the amount of new money (if any) that is for home purchase or home improvement purposes.

Thanks Brenda, I guess I didn't emphasize my question. The point here is that the original loan was by ANOTHER bank, not related to us. I am thinking that the loan officer should not be considering that bank's purpose or collateral (purpose was purchase vacant land and the vacant land was the collateral at bank XYZ). Our lender should only consider OUR collateral and our purpose (collateral was primary residence and purpose was to pay off debt with others). Shouldn't our lender ignore other bank's purpose and coll. and only consider OUR purpose and coll.?

Thanks,

Bump, any takers?

Quote:

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Shouldn't our lender ignore other bank's purpose and coll. and only consider OUR purpose and coll.?

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Not necessarily, look at the GIR and when to report refinancings. If you have knowledge that the loan being refinanced is for HI (even if unsecured) or HP and the new loan is being secured by a dwelling it's reportable.

In your scenario, with the clarification and assuming no loans secured by the residence are also being refinanced, I would agree that your loan is not reportable.

Thanks.