Compliance Q&A: Refinancing a Second Home


We have a question on a loan that is a refinance of a purchase of a second home and is adding funds to pay off personal credit cards. Should be report the HOEPA Status as “Code 3 – NA”?


Assuming the loan is just secured by the second home and is not also secured by the principal dwelling, then yes, it should be reported as “Code 3 – NA” like you said. The reason for this is that HOEPA only applies to: 

…a high-cost mortgage, which is any consumer credit transaction that is secured by the consumer’s principal dwelling…

So the HOEPA rules do not apply to this particular loan and, thus, it would be reported as not applicable for HMDA purposes.

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