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Is a home equity line of credit (HELOC) used for the purpose of refinancing reportable under the Home Mortgage Disclosure Act (HMDA)?

Possibly: see the FFIEC HMDA FAQ for Loan Purpose – Refinancing – Line of Credit that states:

Refinancing --- line of credit. If a dwelling-secured line of credit satisfies and replaces another dwelling-secured obligation, is the line required to be reported as a "refinancing" under HMDA?

Answer: No. A dwelling-secured line of credit that satisfies and replaces another dwelling-secured obligation is not required to be reported as a "refinancing," regardless of whether the line is for consumer or business purposes.

This is not to say that they cannot be reported, and indeed the FAQ for Loan Purpose – Refinancing – Loan Purpose states simply:

Refinancing --- loan purpose. If an obligation satisfies and replaces another obligation, is the purpose of the replaced obligation relevant to whether the new obligation is a reportable "refinancing" under Regulation C?

Answer: No. The new definition of a reportable refinancing looks only to whether (1) an obligation satisfies and replaces another obligation and (2) each obligation is secured by a dwelling. (See §1003.2(k)(2))Thus, for example, a satisfaction and replacement of a loan made for a business purpose is a reportable refinancing if both the new loan and the replaced loan are secured by a dwelling.

As such, if the institution elects to report HELOCs then a ‘refinancing’ of such a HELOC would also appear to be reportable, regardless of the purpose of the original HELOC. This is part of the reason that many institutions elect not to report HELOCs, as it is not clear whether there is or is not an exception.

(October 2016)

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