Suppose a grandmother had a property with two liens, and the grandmother’s estate is transferring the property to a grandchild for the payoffs. The grandchild is getting a HELOC to cover the amounts of the payoffs. The property will be the grandchild’s primary residence and will be the collateral used for the HELOC. The question is, if the deed is recorded before closing, making the loan a cash-out refinance, would we collect GMI (Per Reg B – HMDA not applicable)?
For purposes of Regulation B, monitoring information must be collected if the loan is a purchase or a refinance. If the property transfers before closing, the loan is not a purchase. A refinance must involve the sake borrower. Apparently the existing debt is in the grandmother’s name; the new loan would be in the granddaughter’s name. Different borrowers, therefore not a refinance. If not purchase or refinance then monitoring information is not required for Regulation B.