|
|
|
Commercial/Residential Loan -- Consumer?
by David Dickinson, BOL Guru
Guru Bios
Question: We are doing a loan to finance a commercial building. One floor of this building is going to be leased out for commercial purpose. The other floor is going to be turned into the borrower's primary residence. The consumer's other assets were the factors used for granting the loan, however the building is being used for collateral. We are leaning towards this being a commercial loan since it will be no less that 50/50 commercial vs residence. Are we correct?
Answer: Both Truth in Lending (Reg Z) and RESPA look first to the purpose of the loan, rather than the collateral. If you refer to the Commentary to §226.3(a) you will find a helpful explanation of things to consider for this type of loan. From what you have told me, I would lean toward this being a commercial loan when I reference the 5 bullets in comment #2.
First published on BankersOnline.com 1/16/06
Privacy Policy Disclaimer Recommend This Site ! Contact Us
BankersOnline is a free service made possible by the generous support of our advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all banking professionals. Support our advertisers and sponsors by clicking through to learn more about their products and services.
|
|
|
|
Print Friendly!
Email This Article!
Discuss NOW!