Pub. 6 2017 Issue 2

15 s u mm e r | 2017 F E A T U R E To accurately calculate your two prior calendar year volumes, be sure to count all categories of consumer and commer- cial dwelling-secured loans that will be covered under the 2015 HMDA rules. Don’t overlook those manufactured homes communities that would not have been covered in the past since they would have required a dwelling as security before it would be reportable. In the 2015 HMDA Rule, a loan related to a manufac- tured home community is secured by a dwelling for purposes of 1003.2(f) even if it is not secured by any individual manu- factured homes, but only by the land that constitutes the manufactured home community including sites for multiple manufactured homes. A loan related to a multifamily structure or community that is not a manufactured home community is not considered secured by a dwelling and would not be considered a covered loan. Excluded Dwellings Recreational vehicles, including boats, campers, travel trailers, and park model recreational vehicles, are not considered dwellings, regardless of whether they are used as residences. Houseboats, floating homes, and mobile homes constructed before June 15, 1976, are also excluded, regardless of whether they are used as resi- dences. Also excluded are transitory residences such as hotels, hospitals, college dormitories, and recreational vehicle parks, and structures origi- nally designed as dwellings but used exclusively for commercial purposes, such as homes converted to daycare facilities or professional offices. Originations, Refinances and LoanModifications To determine which covered loans must be included, look first to the definition of “Origination.” Include a covered loan that is originated when the bank approves an application, resulting in an extension of credit via a new debt obligation. Only one institution can originate the loan, so be sure to discuss who will report each loan origination involving multiple parties such as brokers and investors. Carefully review Commentary 1003.1(c) for guidance on interpreting who made the credit decision and who should report the origination. Count only your originations! Refinancing will be defined as a closed- end or an open-end covered loan in which a new, dwelling-secured debt obliga- tion satisfies and replaces an existing, dwelling-secured debt obligation by the same borrower. Refinancings will count towards your annual loan-volume count. To further address uncertainty about HMDA-reportable loans, the new rule’s commentary clarified that if a transaction modifies, renews, extends, or amends the terms of an existing debt, but doesn’t sat- isfy and replace it, loan modifications will not count towards the annual loan volume test. Count your combined consumer and commercial originations carefully! Reprinted with permission from Patti Blenden, Financial Solutions, Inc.