I am looking for where it states that you cannot use the loan purpose "personal".

I realize that this would not be acceptable practice for real estate secure loans, but is there really a regulatory restriction for other loans? Would greatly appreciate help.

Use the loan purpose in what way? If you're talking HMDA, you can do a real estate secured loan for personal reasons such as financing a vacation or an education. It's just not HMDA reportable unless you're paying off another mortgage and taking cash out for personal reasons. That would be a refi.

Right, I am trying to find out if there is a prohibitation for stating that the loan purpose is for "personal reasons" on a non real estate secured loan, and if so where do I find this discussed in regulation.

The Bank Secrecy Act requires a specific purpose on loans in excess of $10,000 not secured by real estate.

Thanks Duchess, I thought there was some reason why this would not be permitted just couldn't remember why.

Additionally - a lot of loan policies in banks state something about the loan purpose being legal. How would anyone now if it's legal or not without a specific purpose. Just makes good sense - although I now working with and being married to a lender that 'sense' doesn't always come into play. Ha!

Tis so true! I was concerned about this because of REG Z education loan requirements and of course a loan amount is not mentioned in that guidance.

Also, without a specific loan purpose, if you have more than one borrower, how would you know if one of them actually meets the definition of a cosigner?....to which you must provide a cosigner notice under Reg AA. If a person receives no goods or services from the loan, that person is a co-signer regardless of the name you apply to the person on the loan documents.

Thanks guys...I appreciate the help.