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HMDA states that institutions should not report loans for “temporary financing.” But, what exactly is temporary financing? The Commentary to §1003.3(c)(3) #1 says, a loan or line of credit is considered temporary financing and excluded… if the loan or line of credit is designed to be replaced by separate permanent financing extended by any financial institution to the same borrower at a later time. In other words, two-phase financing. While that doesn’t sound all that complicated, it is an area where institutions do tend to get tripped up.
David explains more in the video.
Published
2022/06/16