Hello all,
My Credit Union does Home Equity Loans internally and 1st mortgage loans through a third party provider. My question involves the purpose code used on the LAR for new Home Equity Loans. In certain cases, we are reporting loans used to refinance existing loans with another financial institution as Home Purchase loans. Also, in some cases if a member is borrowing against the equity in a home he currently owns to be other real estate properties, we are classifying these loans as Home Purchase loans. IMHO, these loans should be classified as a refinance loan and/or other purpose loans. In neither case is the member purchasing the home he is securing the loan with.
Looking for some guidance, I have looked at CFPB guidance but they are vague as to which purpose codes to use.
Thanks for any assistance you can give.
