If a bridge loan (closed on same day as the purchase money on the new home) is secured by the new home and the current home, and the purpose is to assist in the purchase of the home, does the fact that it is a bridge to be paid from sale of the current home trump the fact that it is used for purchase? Also the bridge and the first on the new home are being closed same day. The first is not necessarily going to be from the same bank.

Trump what?

I guess I was a tad too cryptic! Does the temporary status, which would ordinarily exempt the loan from RESPA, override the fact that it is purchase money since it is secured by the new property? Usually we take the current home, this situation is the new home due to equity issues in the old home.

Temporary loans are exempt from RESPA. However, ROR would apply on the bridge loan.

I have always treated temporary loans as exempt, but counsel was questioning whether the fact it was for purchase would change that, given the new home was the collateral. We decided to check with others. Thanks. Have a nice holiday.

Where the confusion may come from is the reference to the transfer of title to the first user. In your situation you are transferring title but not to the first user.

You too have a nice holiday.

What if it was a transfer of title to the first user - a brand new home purchased from the builder?

Not IMO, the builder would be the first user and your customer is merely buying a home.

Dan - I guess I would disagree with that the definition of a first user would be the customer buying the property from the builder. They would be the first user, the builder most likely only bought bare ground.

Randy, if the builder bought the ground and constructed the home and then sold it I would contend the builder was the first user. However, if the borrowers contracted with the builder to construct the home then I would agree with you.

I read the post as they were buying an already constructed home.