Loan Secured by Son's Home - HMDA Reportable?

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Question:

A couple bought a home for their son and took out a HELOC secured by their own home. The home purchased for the son was titled in the son's name when purchased. Now the son wants to do a loan secured by that home to pay his parents back. Would this be HMDA reportable? I don't think so because the son already owns the property.

Answer:

I would say probably not. It wouldn't be a home purchase loan or a home improvement loan. The only place for it to be HMDA reportable would be as a refinance. In the definition of refinance you have a new loan secured by a dwelling, but those loan proceeds aren't being issued to pay off an existing loan secured by a dwelling so you don't have a refinance.

First published on BankersOnline.com 12/08/08