Hello Everyone,

This is my first time posting a question so I hope this makes sense. If anyone can give me some help I would appreciate it. We have our regulators here and we cannot seem to agree on this situation. HELP!!

I have a HMDA question regarding data collection. Scenario 1: The situation is we have a HMDA reportable loan to 2 individuals and the property securing the loan is titled in the name of a trust. The individuals on the loan are also the trustees on the trust. They property is also their primary residence. Would you report the occupancy as non-owner occupied for HMDA purposes being the trust owns the property not the individuals? and Do you report GMI on the individuals being the loan is to the individuals not the trust?

Scenario 2: Would you report occupancy any different if the loan was to the trust instead of to them individually? And if the loan is to the trust what do you report for GMI?

Can you tell me where I may be able to find some clarification in writing on this question, please.

If the deed/title is to the trust, I would say non-owner occupied.
And if you used the income of the individuals to approve the loan then I would use that figure.

If the loan was to the trust I would still say non owner occupied because the "trust" (owner) doesn't occupy the house...the individuals do...
And if the loan was to the trust and the trust's income is what was relied upon to grant credit then that's the figure I would use

And as far as references go, I'd refer to the HMDA Getting It Right...
Possbily HMDA Heaven here on BOL (link from BOL homepage)

If the loan is to the trust, and the trustees are not cosigners, you would report NA for income and GMI.

If the loan is to the individuals, you need to report the income relied on in making the credit decision (generally the individual's income) and the GMI of the individuals.

As Rizzo said, if the home is owned by the trust, occupancy would be 2. It doesn't matter who the borrower is.

Look in Appendix A of GIR for the instructions for completing each field.

Thanks hmdagal and Rizzo,

That is the answer I thought it should be, too. But, our examiners are saying the individuals who are the borrowers who are also the trustees signing the mortgage would be considered the owners. Therefore for HMDA purposes it is owner occupied. I told them that the trust is an entity and it owns the property not the borrowers which are the individuals in the first scenario. In the second scenario, the trust owns the property, the loan is to the trust and individual people live in the house not the trust which is an entity. So again non owner occupied. They said a trust is not looked at like that for HMDA purposes. You must look at the trustees to see if they live in the house owned by the trust to see if it is owner occupied. I disagree, but there is nothing in Appendix A of GIR to support this one way or they other. So, they are saying they are right. I really could use some written proof.

Perhaps you should inquire with HMDA help and see if your examiners like their answer...

Actually, I pulled an email that I have in my HMDA bible out from HMDA Help that states for applications from non-natural persons (such as corporations, partnerships and the like, creditors are to report "non owner occupied" rather than not applicable...

A trust is a non natural person therefore your code would be 2 - non owner occupied

Are they just digging for something to be wrong

Let me muddy up the waters a bit here.

Our examiners (Feds) go along with your's PLF. We report GMI and owner occupied. Additionally, our mortgages are signed by the borrowers as both trustees and as individuals.

We use the borrowers income to qualify them for the loan. In all my years I've never understood how a loan could be made to a revocable trust. How could they pay it? The borrowers' assets and income are the trust assets.

I think it comes down to the fact that a trust is not an entity like a business. They have no ability to repay the loan and no one to benefit from the loan. At least that's how it was explained to me.

Raise your hand if you love HMDA

I have a similar situation where the title is in the trusts name and the borrowers on the note are the co-trustees of the revocable trust.
Does this make owner occupancy owner occupied??

TR - I'm sure glad I don't have to deal with your examiners. We'd be toe to toe just about every day of the week.

Yes, a revocable trust can be dissolved at anytime, so can most LLCs, Partnerships, etc.

If the property is titled in the trust's name then the trust is a non-natural person and under current rules the owner occupancy would be non owner occupied.

The trustees manage the assets of the trust according to the trust agreement but they do not own the assets unless the trust is dissolved and the assets are transferred to them.

ok...that post of mine is old but still my sop. Let me add upfront that I thoroughly get where Dan and hmdagal are coming from with their side of this discussion.

I did some digging AGAIN on this and found the following in the HMDA Glossary at the FFIEC website, last modified 7/18/13.



Note, that says nothing about how the property is titled.
I'm thinking that is what my FRB examiners are basing their acceptance of my coding on.

Never thought I'd be defending an examiner's take on things!
Must be that it's Friday the 13th.

I didn't pay any attention to the date on your post TR.

Note, that says nothing about how the property is titled.


Ownership is determined based on how the property is titled.

Based on the cite you posted the dwelling would not be the trust's principal dwelling since a trust or other entity does not "dwell" . It would be the trustee's principal dwelling but they are not owners as long as the trust is in place or the trust transfers ownership to them.

Agreed, Dan.

I think the problem comes from the fact that the owners are the same people just in different incarnations.

I just offered what I have been directed to do.

Bottom line, check with your EIC and go with what they tell you.

If the loan is to a Trust to purchase a house for the trustees to live in would I report this as an investment property?

If they are purchasing an investment property would I then code is business purpose?

In general we code all purchases of an investment property as business purpose since usually they plan to turn a profit on them even if it's not their business. For consistency sake I feel like I should though I am not sure I could prove it.

First, your response is to a thread that is ten years old. Second, without knowing what sort of trust you are talking about and how the loan is structured, etc., this question is not possible to answer.

For example, my spouse and I establish a revocable living/family trust and want to purchase a primary residence and place the home in the trust. This would also be a consumer loan under Regulation Z under 1026.3(a) - Comment 10

I sure hope that your only borrower is not the trust in this sort of transaction. If one or more of the individual settlors are not borrowers on the loan and my spouse and I choose to revoke the trust, who do you plan to collect from?

In general we code all purchases of an investment property as business purpose since usually they plan to turn a profit on them even if it's not their business.

Unless all of your investment properties or non-owner occupied rental homes that is a dangerous precedence. Purchasing an "investment" property could very well be a "personal" investment.