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Modular homes. Is just a home that is modular manufactured house for purposes of Regulation C?
Response: For Regulation C reporting, a manufactured house is one which fits the HUD rule, 12 CFR 203.2(i). The formal staff commentary shows that modular houses which are prepared for occupancy if they leave the factory and fulfill every one of the HUD rule requirements are contained in the concept of “manufactured house”. 203.2(i)-1. The comment, and a previous FAQ on this website, have actually raised questions regarding whether a modular house ought to be reported being a manufactured home or as a single- to dwelling that is four-family. Through to the Board provides further guidance regarding modular domiciles, loan providers may, at their option, report a modular house as either a single- to four-family dwelling or as being a manufactured house.
This FAQ supersedes the previous FAQ on modular domiciles published in December 2003.
Conditional approvals—customary loan-commitment or loan-closing conditions. The commentary suggests that an organization states a “denial” if an organization approves that loan at the mercy of underwriting conditions (except that customary loan-commitment or conditions that are loan-closing as well as the applicant will not fulfill them. See remark 4(a)(8)-4. Exactly what are customary loan-commitment or loan-closing conditions?
Response: Customary loan-commitment or loan-closing conditions consist of clear-title demands, appropriate home study, appropriate name insurance coverage binder, clear termite examination, and, in which the applicant intends to utilize the arises from the purchase of just one house to buy another, funds declaration showing adequate arises from the purchase. See comments 2(b)-3 and 4(a)(8)-4. A job candidate’s failure to meet up some of those conditions, or a condition that is analogous causes the application form to be coded “approved not accepted. ” Customary loan-commitment and loan-closing conditions usually do not consist of (1) conditions that constitute a counter-offer, such as for example a demand for a greater down-payment; (2) underwriting conditions regarding the borrower’s creditworthiness, including satisfactory debt-to-income and loan-to-value ratios; or (3) verification or verification, in whatever kind the financial institution ordinarily calls for, that the debtor satisfies underwriting conditions concerning debtor creditworthiness.
Conditional approvals—failure to fulfill creditworthiness conditions. Exactly exactly How should a loan provider rule “action taken” where in fact the debtor doesn’t satisfy conditions creditworthiness that is concerning?
Response: If a credit choice will not be made and also the debtor has expressly withdrawn, utilize the rule for “application withdrawn. ” That code just isn’t otherwise available. See Appendix A, I.B.1.d. If the condition involves publishing more information about creditworthiness the lending company has to produce a credit choice together with applicant have not taken care of immediately a demand when it comes to more information in the time allowed, use the rule for “file closed for incompleteness. ” See Appendix the, I.B.1.e. If the borrower has provided the info the financial institution calls for for a credit decision and also the loan provider denies the program or stretches a counter-offer that the borrower will not accept, utilize the rule for “application denied. ” Then make use of the rule for “application authorized however accepted. In the event that debtor has pleased the underwriting conditions associated with loan provider plus the loan provider agrees to increase credit nevertheless the loan just isn’t consummated, “
For instance, if approval is trained on a reasonable assessment and, despite notice for the requirement for an assessment, the applicant decreases to acquire an assessment or will not react to the lending company’s notice, then your application must be coded “file closed for incompleteness. ” Then the lending company must utilize the rule for “application rejected. If, having said that, the applicant obtains an assessment nevertheless the assessment doesn’t offer the thought loan-to-value ratio therefore the loan provider is consequently perhaps not happy to expand the mortgage quantity desired, ”
Refinancing — coverage vs. Reporting. Why exist two definitions of “refinancing, ” one for “coverage” plus one for “reporting”?
Solution: a loan provider makes use of the reporting definition, 203.2(k)(2), to find out whether or not to report a certain application, origination, or purchase being a “refinancing” into the loan function industry; a loan provider makes use of the coverage definition, 203.2(k)(1), to find out whether or not the organization has enough house purchase loan task, including refinancings of house purchase loans, when it comes to organization become included in HMDA. See 203.2(e)(1)(iii), 203.2(e)(2)(i) and (iii). The coverage meaning just isn’t strongly related determining whether or not to report a specific deal as a refinancing.
Refinancing — loan purpose. If an obligation satisfies and replaces another responsibility, could be the function of the changed responsibility strongly related whether or not the brand new responsibility is a reportable “refinancing” under Regulation C?
Response: No. The brand new concept of a refinancing that is reportable simply to whether (1) an obligation satisfies and replaces another responsibility and (2) each responsibility is guaranteed by a dwelling. See 203.2(k)(2). Therefore, for instance, a satisfaction and replacement of that loan created for a business function is just a refinancing that is reportable both the latest loan together with replaced loan are guaranteed by way of a dwelling.
Refinancing— relative type of credit. In cases where a dwelling-secured type of credit satisfies and replaces another dwelling-secured responsibility, is the line expected to be reported as a “refinancing”?
Response: No. A dwelling-secured personal credit line that satisfies and replaces another dwelling-secured responsibility is not essential to be reported as being a “refinancing, ” no matter whether the line is actually for consumer or company purposes.
Refinancing — guaranty secured by dwelling. If an responsibility guaranteed by a dwelling is pleased and changed by the responsibility by which a guaranty associated with credit responsibility is guaranteed by a dwelling nevertheless the brand new credit responsibility is perhaps perhaps perhaps not guaranteed by a dwelling, may be the transaction reportable under HMDA?
Response: No, a transaction just isn’t reportable as house purchase loan or refinancing unless the credit responsibility, it self, is guaranteed by way of a dwelling. See 203.2(h), 203.2(k)(2). An responsibility maybe perhaps perhaps not guaranteed with a dwelling is reportable as being a true do it yourself loan only when classified because of the loan provider as a house enhancement loan. See 203.2(g)(2).
Refinancing — satisfaction of lien. May be the satisfaction of the lien (mortgage) strongly related determining whether an responsibility is a refinancing that is reportable?
Response: No, the satisfaction of a lien is neither necessary nor enough to generate a reportable refinancing. The credit responsibility should be satisfied and changed; it’s not appropriate whether or not the lien is pleased and changed. See 203.2(k)(2)
Refinancing — money down for do it yourself. Exactly just How should a loan provider code a dwelling-secured loan whenever the debtor utilizes the funds both to pay off a preexisting dwelling-secured loan and also to help with a dwelling?
Response: a loan that is dwelling-secured satisfies the definitions of both “home enhancement loan” and “refinancing” should really be coded as a “home enhancement loan. “See comment 203.2(g)-5. The financial institution must code the mortgage as being a “home enhancement loan” regardless of if the loan provider will not classify it into the loan provider’s own documents being a “home enhancement loan. ” See 203.2(g)(1).
MECAs. Should MECAs (Modification, Extension and Consolidation Agreements) be reported under HMDA as refinancings?
Response: No. The guideline is unchanged: MECAs aren’t reportable as refinancings under Regulation C. See 67 Fed. Reg. 7221, 7227 (Feb. 15, 2002). The comment that is applicable inadvertently omitted if the Commentary ended up being revised in 2002; the remark will undoubtedly be restored once the Commentary is next revised.
Temporary Financing. Whenever is that loan “temporary financing” so that it is exempt from reporting?
Answer: The regulation listings as samples of short-term funding construction loans and connection loans. See 203 titlemax salary.4(d)(3). Construction and connection loans are illustrative, maybe perhaps not exclusive, samples of short-term funding. The examples suggest that funding is short-term in case it is made to be changed by permanent funding of the much long term. That loan is certainly not short-term funding simply because its term is quick. For instance, a lender can make a loan having a 1-year term to allow an investor to shop for a house, renovate it, and re-sell it ahead of the term expires. Such that loan should be reported being a true house purchase loan. See 203.2(h).
Reverse Mortgage—reporting. Does a loan provider need to report informative data on applications and loans reverse that is involving?
Answer: Reverse mortgages are at the mercy of the rule that is general loan providers must report applications or loans that meet up with the concept of a property purchase loan, do it yourself loan, or refinancing ( see 12 C.F.R. § 203.2(g)-(h), (k)).
Note, but, that reporting is optional in the event that reverse mortgage (in addition to qualifying being home purchase loan, do it yourself loan, or refinancing) can be a house equity credit line (HELOC). See 12 C.F.R. § 203.4()( that is c). The staff that is official to Regulation C states that a loan provider whom opts to report a HELOC should report within the loan amount industry just the part of the line designed for home improvement or house purchase. See comment 4(a)(7)-3.
Program—In basic. A component for the concept of “preapproval request” may be the presence of the “program. ” Exactly just exactly How could it be determined whether a scheduled program exists?
Response: A preapproval system exists once the procedures used and established by the loan provider match those specified in 203.2(b)(2). An application, irrespective of its name, just isn’t a “preapproval system” for purposes of HMDA in the event that scheduled system will not meet up with the specs when you look at the legislation. Because of the exact same token, a course could be a preapproval system for purposes of HMDA though it just isn’t therefore called. The real question is if the loan provider regularly utilizes the procedures specified into the legislation. Those requests need not be treated as requests for preapproval under HMDA if a lender has not established procedures like those specified in the regulation, but considers requests for preapproval on an ad hoc basis. Failure to determine and consistently follow uniform procedures, however, may raise fair-lending and safety-and-soundness dilemmas.
Program—Commitment letter issued on demand. In cases where a loan provider problems dedication page just during the applicant’s demand, does the lending company have preapproval system?
Response: then the lender has a preapproval program regardless whether the lender gives a written commitment to all applicants who qualify for preapproval or only to those qualifying applicants who specifically ask for a commitment in writing if a lender will as a general matter issue written commitments under the terms and procedures described in 203.2(b)(2.
Preapproval demand accepted and approved, but loan not originated. Just exactly How should a loan provider report a preapproval demand it offers authorized where in fact the debtor afterwards identified a house into the loan provider but financing had not been originated?