For years, HMDA has caused all kinds of headaches. In fact, the acronym “HMDA” itself could just as easily stand for Head Migraine Day Again. The reason for this, of course, is that HMDA is an infinitely detailed rule, but the rules don’t address every situation which often leaves those responsible stuck between a rock and a hard place, which I commonly refer to as the “gray area” of HMDA. One area that seems to be in this category relates to how an interest buyout should be reported for HMDA purposes. This article attempts to break down the HMDA purpose reporting requirements for “interest buyout” loans.
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