Reverse Mortgages
Are Reverse Mortgage Loans reportable applications for HMDA? If so, what loan amount should be reported?
Here is the FAQ answer from the FFIEC.GOV website. http://www.ffiec.gov/hmda/faqreg.htm#reverse There are links embedded within the response, so you may want to go to the actual site. (See link above.) Reverse Mortgage---reporting. Does a lender have to report information on applications and loans involving reverse mortgages? Answer: Reverse mortgages are subject to the general rule that lenders must report applications or loans that meet the definition of a home purchase loan, home improvement loan, or refinancing (see 12 C.F.R. § 203.2(g)-(h), (k)). Note, however, that reporting is optional if the reverse mortgage (in addition to qualifying as a home purchase loan, home improvement loan, or refinancing) is also a home equity line of credit (HELOC). See 12 C.F.R. § 203.4(c)(3). The official staff commentary to Regulation C states that a lender who opts to report a HELOC should report in the loan amount field only the portion of the line intended for home improvement or home purchase. See comment 4(a)(7)-3.
So, I should assume that a reverse mortgage that initially refinances the existing debt on the property and subsequently advances an annuity payment should be reported with the balance of the existing debt as the loan amount. And, in the case where there is no existing debt to be replaced and the annuity payment begins at the closing of the loan, I should assume that these should not be reported. Or am I totally losing my marbles?? Thanks!
Wouldn't this also depend on the plan? If a client opted with the line of credit and the lender does not report HELOC loans, wouldn't these also be exempt?
To throw another kink in the plan, we are doing them as closed in. This means they must be reported. When reported, does anyone know what "loan amount" should be reported? I assume it would be the initial advance.
I believe my original link above still answers your question? The official staff commentary to Regulation C states that a lender who opts to report a HELOC should report in the loan amount field only the portion of the line intended for home improvement or home purchase.
That was my thought too. Since it didn't specifically state "refinance" in the HOEQ section, I wanted to make sure. We are doing these by a manual process, so we are trying to be as specific as we can.
Thanks for the post. Kate http://www.caring.com/reverse-mortgage