Yes, we believe that this dwelling-secured loan is reportable under the new HMDA rules that became effective in 2018. We believe that a loan secured by an assignment of a beneficial interest in a land trust should be treated as secured by a dwelling, provided that the land trust holds a dwelling.
Under the new HMDA rules in Regulation C, a business-purpose loan is reportable only if it is made for purposes of home improvement, home purchase or refinancing a dwelling-secured loan. This loan is reportable under that standards because it is a refinancing of a dwelling-secured loan. We do not believe that the loan should be reported as a home improvement loan, since its proceeds are intended only for the improvement of a restaurant, not a dwelling.
For resources related to our guidance, please see:
- Regulation C, 12 CFR 1003.3(c)(10) (Regulation C does not apply to “(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 § 1003.2(i), a home purchase loan under § 1003.2(j), or a refinancing under § 1003.2(p)
- Regulation C, 12 CFR 1003.2(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.”)
- Regulation C, 12 CFR 1003.2(i) (“Home improvement loan means a closed-end mortgage loan or an open-end line of credit that is for the purpose, in whole or in part, of repairing, rehabilitating, remodeling, or improving a dwelling or the real property on which the dwelling is located.”)