QUESTION
We are getting ready to do a loan to our parent company, to “refinance” a model home in Texas. As this is technically a refinance, would it be reported on our mortgage call report?
ANSWER
As this is for refinance of a commercial loan on a model home which is not “primarily for personal, family, or household use,” you do not report it on the mortgage call report.
Analysis
NMLS
Companies that hold a state license or state registration through NMLS will be required to complete a Mortgage Call Report. [See NMLS Resource Center, State Licensing, Common Requirements, Mortgage Call Report]
This includes a report on “Residential Mortgage Loan Activity (RMLA)”. [Idem]
The NMLS instructions define a “Loan or Residential Mortgage Loan” as “[a]ny loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling as defined in section 103(v) of the Truth in Lending Act) or residential real estate upon which is constructed or intended to be constructed a dwelling (as so defined).” (Emphasis added.)
Further, under the definition for “Application” as that term is used in reporting, the NMLS instructs the user to “[e]xclude any commercial/business/investment purpose encumbrances from reporting.”
State Statutory
The Mortgage Call Report requirement of the Texas S.A.F.E. Act provides that “[e]ach licensed residential mortgage loan originator shall submit to the Nationwide Mortgage Licensing System and Registry a report of condition that is in the form and contains the information required by the Nationwide Mortgage Licensing System and Registry.” [Tex. Fin. Code Sec. 180.101]
The regulations under the federal S.A.F.E Act and state S.A.F.E. Acts define the term “residential mortgage loan” as: “a loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling or on residential real estate[.]” [12 CFR § 1008.23; Tex. Fin. Code § 180.002(18)]
Under federal and state requirements for the mortgage call report, only “residential mortgage loans” must be reported.
Brennan Holland
Director/Legal & Regulatory Compliance
Lenders Compliance Group
