Refinance of Primary Residence - Collecting GMI

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Question:

Should GMI be collected on a primary residence refinance when additional money is added to the mortgage amount?

Answer:

If the loan is subject to HMDA reporting, then GMI should be collected in accordance with provisions of HMDA. Regardless of HMDA reporting, however, Reg B section 202.13 requires collection of monitoring information for any credit application primarily for the purchase or refinance of the borrower's primary residence. So here the key question is whether your new loan is primarily for the purpose of refinance. If more than 50% of the proceeds of the new loan are going to pay off the existing loan, I would say the answer is yes and monitoring information should be collected.

First published on BankersOnline.com 7/07/08