The definition of home improvement loans has changed to provide greater consistency among reporting institutions and, thus, to increase the usefulness of the data.
The regulation currently permits lenders to report only those loans (secured or unsecured) where a portion of the proceeds will be used for home improvement and the lenders classify the loan as a home- improvement loan on their systems. Reporting systems differ from bank to bank, making comparison of home improvement lending data difficult between institutions.
Home Improvement Loan has been revised to differentiate between secured and unsecured home improvement loans. The rule for dwelling-secured loans has been modified, and the rule for unsecured loans remains the same. Lenders must now report all dwelling-secured loans that have a home improvement purpose, regardless of whether the lender classifies the loans as home improvement loans.
WHEN IS A LOAN A HOME IMPROVEMENT LOAN UNDER THE AMENDED REGULATION?
Secured transactions: Lenders must determine if any part of the loan’s proceeds are intended for home improvement purposes and, if so, report the transaction as a home improvement loan. This rule applies regardless of how the lender has classified the loan.
Lenders may rely on applicants' statements and are not required to take other specific steps to determine the loan purpose. However, it may be helpful for the lender to use a check box or a blank on an application form for the applicant to enter the purpose of the loan.
The regulation currently permits lenders to report only those loans (secured or unsecured) where a portion of the proceeds will be used for home improvement and the lenders classify the loan as a home- improvement loan on their systems. Reporting systems differ from bank to bank, making comparison of home improvement lending data difficult between institutions.
Home Improvement Loan has been revised to differentiate between secured and unsecured home improvement loans. The rule for dwelling-secured loans has been modified, and the rule for unsecured loans remains the same. Lenders must now report all dwelling-secured loans that have a home improvement purpose, regardless of whether the lender classifies the loans as home improvement loans.
WHEN IS A LOAN A HOME IMPROVEMENT LOAN UNDER THE AMENDED REGULATION?
Secured transactions: Lenders must determine if any part of the loan’s proceeds are intended for home improvement purposes and, if so, report the transaction as a home improvement loan. This rule applies regardless of how the lender has classified the loan.
Lenders may rely on applicants' statements and are not required to take other specific steps to determine the loan purpose. However, it may be helpful for the lender to use a check box or a blank on an application form for the applicant to enter the purpose of the loan.
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