Commercial or Consumer Loan: Which?

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Question:

I have a borrower with a term loan used for improvements to his dental office ($50,000) and purchase of a vacation home ($200,000). The collateral is business assets and first deed of trust on home. Is this considered a commercial or consumer loan, and is it HMDA reportable?

Answer:

Assuming the vacation home is not going to be rented out, I would say this is a consumer-purpose loan as the primary purpose (by a 4-1 margin) is consumer. Also, since it is a loan to purchase a dwelling and is secured by a dwelling, I would say it is HMDA reportable.

First published on BankersOnline.com 12/06/10