With the RReal changes, my operations area is concerned about increased reporting and reporting accurately. One of the scenarios they are concerned about is taking a subordinate lien on a personal residence as an abundance of caution on commercial loans which is a common practice. Would you report this transaction as a subordinate lien? Let me know if you need additional info to respond. Thank you.

Business purpose loans were exempt under the old rules, however I don't find that exemption in the new rules. I will email Mr. Evans for an opinion but with today being MLK day I won't get a reply for a day or two. As soon as I get his response I will let you know.

Just received the following email:

Hi Dan,

I received clarification from the Department of Financial Institutions concerning the reporting requirements. If the loan is secured by a single 1-4 family residential property, it is reportable. Regardless of the purpose of the loan. This includes but is not limited to single 1 – 4 family residential property used as investment or rental property.

Thanks,

Randall Evans
Project Manager
Title Insurance Division
Indiana Department of Insurance
317-234-5881-Phone
ranevans@idoi.in.gov

Additional clarification.

From: Dan Persfull
Sent: Friday, January 20, 2012 11:41 AM
To: Evans, Randall
Subject: RE: RREAL IN: Workarounds and Clarification

Randy,

One last clarification. In an earlier reply you mentioned it did not apply to "business transactions" and only to individuals.

So just to be clear, in light of the DFI's response, would the reporting requirements apply to a loan made to a Corporation, Partnership or Limited Liability Company? I want to be sure I'm clear on this so I have our procedures modified correctly.

Thank you,
Dan


From: Evans, Randall [mailto:RanEvans@idoi.IN.gov]
Sent: Friday, January 20, 2012 11:43 AM
To: Dan Persfull
Subject: RE: RREAL IN: Workarounds and Clarification

Yes, it does apply if the transaction involves a single family residential property, located in Indiana.

Thanks,

Randall Evans
Project Manager
Title Insurance Division
Indiana Department of Insurance
317-234-5881-Phone
ranevans@idoi.in.gov

Just to clarify, if we are referring to an existing mortgage on residential property, should those be reported? Thanks.