We are doing a loan where a mortgage is being taken as an abundance of caution and the term is 12 months.

The funds will be used to purchase the property.

Are disclosures required?

Yes. Abundance of caution only gets you 'out' of the appraisal requirements. All other regulations apply.

Unless it qualified as a "bridge" or "swing" loan, i think RESPA would apply. I don't believe the abundance of caution in and of itself gets you out of it.

And since it is a closed-end loan subject to Reg Z, MDIA would also apply, correct?

Oh...and....this loan is being underwritten as unsecured; however, we will be taking an AOC mortgage on the property being purchased and on the property they currently live in. So, in part, it is a bridge loan I guess.

So, having said that, does that change the requirement to disclose?

If RESPA applies, MDIA applies. As to the bridge loan part (this is just my opinion, have rarely dealt with bridge loans)--i think it would/might hinge on whether the loan was intended to be paid off with the proceeds of the sale of their current home. If that were the case, i believe that would be the definition of a bridge loan. Again, just my opinion.

We asked the lender for the application and he said that he did not have to get an application, since the loan amount was over $25,000 and it was a bridge loan.

I am used to always getting a loan application.

Wouldn't we want one?

Bridge loans are not exempt from Reg. B. Reg B 202.13 requires a written application if the purpose of the loan is to purchase, or refinance the purchase of the consumer's primary dwelling and secured by that dwelling. Commentary 202.13(b).


Once they secured the loan with the real estate the $25,000 or greater Reg Z exemption the loan officer is referring to went out the window.