Is This Refinanced Business Loan HMDA Reportable

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Question:

A customer purchased rental property with a line of credit at another bank. We are refinancing the loan, and taking a first deed of trust on the property. Is this HMDA reportable? I have been told that on business purpose loans that get refinanced from one bank to another are excluded. Is this correct?

Answer:

No, you were not given correct information. For HMDA reporting purposes, a refinancing is ANY dwelling secured loan that is satisfied and replaced by another dwelling secured loan to the same borrower. The purpose of the loan has no bearing, unless a portion of the new loan would be for another dwelling purchase, or home improvement and then it would be reported either as a purchase or home improvement.

First published on BankersOnline.com 2/13/06