{"id":1566,"date":"2019-03-14T17:34:18","date_gmt":"2019-03-14T17:34:18","guid":{"rendered":"https:\/\/albanknews.com\/?p=1566"},"modified":"2019-03-14T17:34:24","modified_gmt":"2019-03-14T17:34:24","slug":"compliance-qa-use-of-line-of-credit-for-a-rental-property-is-it-hmda-reportable","status":"publish","type":"post","link":"https:\/\/albanknews.com\/?p=1566","title":{"rendered":"Compliance Q&A: Use of Line of Credit for a Rental Property: Is it HMDA Reportable?"},"content":{"rendered":"\n

Question:<\/strong><\/p>\n\n\n\n

We have a commercial customer with a line of credit that they use for working capital. They may also use the line for any other type of business-related expense. So, the commercial borrower used this original line to purchase a rental property. Now, we are paying down the line of credit with the property that was purchased as security. The original line won\u2019t be fully paid down. Is this HMDA-reportable?<\/p>\n\n\n\n

Answer:<\/strong><\/p>\n\n\n\n

No \u2013 this is not HMDA-reportable. This is because a commercial-purpose loan is only reportable as a home purchase loan, home improvement loan, or refinance. This situation only possibly implicates \u201crefinance\u201d for HMDA purposes (since there\u2019s no indication that this is a home purchase or home improvement loan). However, this type of transaction does not constitute a \u201crefinance\u201d under HMDA because the new loan is only paying down the existing line of credit, rather than fully satisfying and replacing the line.<\/p>\n\n\n\n

(10) A closed-end mortgage loan or open-end line of credit that is or will be made primarily for a business or commercial purpose, unless the closed-end mortgage loan or open-end line of credit is a home improvement loan under \u00a7 1003.2(i), a home purchase loan under \u00a7 1003.2(j), or a refinancing under \u00a7 1003.2(p);<\/p>\n\n\n\n

12 CFR 1003.3(c)(10): https:\/\/www.consumerfinance.gov\/policy-compliance\/rulemaking\/regulations\/1003\/3\/#c-10<\/a>:<\/p>\n\n\n\n

1. Loan or line of credit secured by a lien on unimproved land. Section 1003.3(c)(2) provides that a closed-end mortgage loan or an open-end line of credit secured by a lien on unimproved land is an excluded transaction.<\/p>\n\n\n\n

(p) Refinancing means a closed-end mortgage loan or an open-end line of credit in which a new, dwelling-secured debt obligation satisfies and replaces an existing, dwelling-secured debt obligation by the same borrower.<\/p>\n\n\n\n

12 CFR 1003.2(p):\u00a0https:\/\/www.consumerfinance.gov\/policy-compliance\/rulemaking\/regulations\/1003\/2\/#p<\/a><\/p>\n\n\n\n

\n\n\n\n

Compliance Alliance offers a comprehensive suite of compliance management solutions. To learn how to put them to work for your bank, call (888) 353-3933<\/strong> or email info@compliancealliance.com<\/a><\/strong>.<\/p>\n\n\n\n

Not a member? <\/strong>Learn more about membership with Compliance Alliance by attending one of our live demos:<\/p>\n\n\n\n

\u00b7         Live Demo on Tuesday, March 21st<\/sup> @ 1:00 pm CT.<\/a><\/strong><\/p>\n\n\n\n

Compliance rules and regulations change quickly! For timely compliance updates, subscribe to Compliance Alliance\u2019s email newsletters<\/a><\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Question: We have a commercial customer with a line of credit that they use for working capital. They may also use the line for any other type of business-related expense. So, the commercial borrower used this original line to purchase a rental property. Now, we are paying down the line of credit with the property that was purchased as security. The original line won\u2019t be fully paid down. Is this HMDA-reportable? Answer: No \u2013 this is not HMDA-reportable. This is because a commercial-purpose loan is only reportable as a home purchase loan, home improvement loan, or refinance. This situation only […]<\/p>\n","protected":false},"author":1,"featured_media":1070,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[19,33,23],"tags":[],"class_list":["post-1566","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-breaking","category-compliance-qa","category-publications","has_thumb"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/albanknews.com\/wp-content\/uploads\/2017\/11\/compliance-alliance.png?fit=800%2C800&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p4Y3P2-pg","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/posts\/1566","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1566"}],"version-history":[{"count":1,"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/posts\/1566\/revisions"}],"predecessor-version":[{"id":1568,"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/posts\/1566\/revisions\/1568"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/media\/1070"}],"wp:attachment":[{"href":"https:\/\/albanknews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1566"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1566"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1566"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}