I'm really drawing a blank for some reason on whether or not a non borrowing property owner has to receive the preliminary truth in lending or just the final truth in lending and ROR? We have a loan where the borrowers parents also own and occupy the property and we did not provide an early TIL.

Thank you,

Dawn

Anyone who has a right to rescind should receive the early TIL. This thread linked below discusses it further:

Previous Discussion

In all my years as a MLO and a CO, I have never given a copy of an eTIL to the other parties, just the final closing disclosures. If the original TIL served AS the final disclosure, this was given...otherwise, the final prepared TIL was given.

It's hard for me to believe an eTIL is considered material unless it ends up serving as the fTIL.

Because rescission begins when the last of certain items is given...what purpose would it serve to deliver an eTIL if there is a fTIL. If the eTIL serves as the fTIL, then you would give this in conjunction with the ROR form.

(3)(i) The consumer may exercise the right to rescind until midnight of the third business day following consummation, delivery of the notice required by paragraph (b) of this section, or delivery of all material disclosures, whichever occurs last. If the required notice or material disclosures are not delivered, the right to rescind shall expire 3 years after consummation, upon transfer of all of the consumer's interest in the property, or upon sale of the property, whichever occurs first. In the case of certain administrative proceedings, the rescission period shall be extended in accordance with section 125(f) of the Act.

(ii) For purposes of this paragraph (a)(3), the term “material disclosures” means the required disclosures of the annual percentage rate, the finance charge, the amount financed, the total of payments, the payment schedule, and the disclosures and limitations referred to in §§1026.32(c) and (d) and 1026.35(b)(2).

Subpart C—Closed-end Credit
§ 1026.17 General disclosure requirements.
(a) Form of disclosures. (1) The creditor shall make the disclosures required by this subpart clearly and conspicuously in writing, in a form that the consumer may keep.

(b) Time of disclosures. The creditor shall make disclosures before consummation of the transaction. In certain residential mortgage transactions, special timing requirements are set forth in §1026.19(a).

(d) Multiple creditors; multiple consumers. If a transaction involves more than one creditor, only one set of disclosures shall be given and the creditors shall agree among themselves which creditor must comply with the requirements that this part imposes on any or all of them. If there is more than one consumer, the disclosures may be made to any consumer who is primarily liable on the obligation. If the transaction is rescindable under §1026.23, however, the disclosures shall be made to each consumer who has the right to rescind.

I don't believe a TIL disclosure can be considered accurate (material) until it is in it's final form...again, the eTIL may very well be identical to the fTIL, but if the fTIL changes, it will be the 'material' disclosure given along with 2 copies of the ROR. If you do not prepare a fTIL because the eTIL is accurate, or considered accurate, it will be the material disclosure.

My point is...you do not have to give the non-borrowing parties anything but the 'final' material disclosure(s), whichever they may be.

The requirements of the ETIL and the material disclosures are not one in the same.

1026.17 identifies the general disclosure requirements for the ETIL estimations. In its timing requirement it specifically refers to the requirements of .19(a) and then it goes on to say in .17(d) that each consumer who has the right to rescind is to receive a copy of the disclosure; for the purposes of rescission non borrowing parties are consumers if a security interest is being taken in their primary residence.

It's impossible to argue your point, as I agree that's the way it's written. How it's never been an issue, especially with the secondary market befuddles me.

Our compliance group has gone round and round about this: If the party in the primary residence is leasing or renting the property, should they receive ROR? I say no, but after reading Dan's excerpt, I wonder?

How can the primary resident be leasing or renting the property?

I believe it says the party is IN the primary residence; I would take that to be a tenant. If a tenant they are not an owner so no ROR.

I say no, but after reading Dan's excerpt, I wonder?

See the definition of a consumer in 1026.2 and its Commentary.

.....if that person's ownership interest in the dwelling is or will be ..........

I'm searching and found this thread. My question deals with making a loan to a trust that is secured by a single family residence held in the trust. The trustee's are the daughters of the mom who lives in the house that the trust owns. I'm thinking this falls outside TILA and RESPA, as the borrower is a nonperson entity, and further, the trustee's are not occupant's of the home. Can anyone confirm my opinion on this?

Under Reg Z a trust, other than a bona fide land trust, would not be a consumer.

Good afternoon,

I would like to bring this thread back to life; only in regards to a purchase...

We have two borrowers (mom and dad) purchasing a home for their daughter. The daughter is NOT on the loan, but she is deeded onto the property. Since she is signing the Mortgage at close, shouldn't she also receive a Final TIL?

Thank you-

No. That rule only applies to recission rules.

Thank you, RR Joker...That is what I thought...and our closing docs were set up correctly, but the title company drew a signature line on the Final TIL and had the non-borrowing owner sign it at close. The processor stated that the Realtor made it mandatory...

A signature is proof positive that the borrower saw the disclosure, but unless a bank policy, there are no federal signature requirements on a TIL.

rant warning.
YOUR BANK is responsible for compliance.
No one should ever be allowed to change your docs.
If this were my loan, I'd be on the phone to the head of this title company letting them know that if any of my docs were ever changed again without my express permission, that would be the last time I'd use their services.
How in the name of cod they justify letting a REALTOR dictate who should sign a doc is beyond me.
And I say this as a former title company closer who would have gotten kicked to the curb for letting this happen at a closing.

rant over

FWIW, My eyes bugged out too at the mention of the realtor making that kind of call...wow!