Home Improvements, New Improvements, and HMDA Reporting

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Question:

Client is requesting a $13,000 home improvement loan paying off an unsecured $3,000 home improvement loan with additional funds of $10,000 for new improvements. This is not reportable in 2004 as a refinance. Should it be reported as a home improvement loan or not reported under HMDA at all.

Answer:

Yes, this should be treated as a refinance (assuming it is secured by a dwelling). If it is not secured by a dwelling, the loan must be classified as a home improvement loan or else it is not HMDA reportable.

First published on BankersOnline.com 9/15/03