Compliance Q&A: HMDA and Refinance Considerations

Question: Bank A has a loan that is paying off a dwelling with funds from a new dwelling secured loan. The old and new loans are not secured by the same dwelling, but they are both to the same borrower. Would this be reported as a Refinance for HMDA purposes?

Answer: Under HMDA’s definition of a Refinance, the old and new loans do not have to be secured by the same dwelling, as long as they both are to the same borrower. As such, this would be reported as a Refinance.  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.


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