Skip to content
BOL Conferences Top Gun 23
Thread Options
#1825299 - 06/19/13 09:01 PM Bringing in the Primary Dwelling
Bec Offline
Diamond Poster
Bec
Joined: Jul 2010
Posts: 1,114
The Great White North
Hello all.
Lender is doing a loan to acquire land and the land also has a rental property. The lender would like to now bring in the primary dwelling so the customers only have one payment. Would this then become a RESPA covered loan?
_________________________
Go Packers

Return to Top
Lending Compliance
#1825302 - 06/19/13 09:06 PM Re: Bringing in the Primary Dwelling Bec
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 80,341
Galveston, TX
What is the primary purpose of the loan? To purchase rental property or refinance a primary dwelling. The borrowers are really going to skew up their mortgage deduction doing this, make accounting for rental income pretty complex, and possibly put their primary dwelling on the line if some breaks a leg in the rental property.

The first thing I would be recommending to the borrowers is to go talk to an attorney. Having one payment is the least of their worries.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1825306 - 06/19/13 09:13 PM Re: Bringing in the Primary Dwelling Bec
Bec Offline
Diamond Poster
Bec
Joined: Jul 2010
Posts: 1,114
The Great White North
The refinance of the primary is about $25,000 in a $500,000 loan. Of course the words abundance of caution were thrown around for the primary being added in the security. Would you say that it would be a better idea to leave off the primary altogether?

eta the land is the the thing of most value in this deal and they may or may not rent out the dwelling on the land
Last edited by Bec; 06/19/13 09:14 PM.
_________________________
Go Packers

Return to Top
#1825315 - 06/19/13 09:20 PM Re: Bringing in the Primary Dwelling Bec
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 80,341
Galveston, TX
Then it sounds like a personal investment to me and not the purchasing of rental property and that makes the loan consumer purpose all the way.

How they structure the deal is up to the customer, but for the loan officer to be suggesting something that could cause immeasurable consequences to the borrower is unconscionable if not specifically required.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1825651 - 06/20/13 04:57 PM Re: Bringing in the Primary Dwelling Bec
Bec Offline
Diamond Poster
Bec
Joined: Jul 2010
Posts: 1,114
The Great White North
If the land is over 25 acres, that exempts this loan from RESPA correct?

Could you maybe explain though how liability on the rental could effect their primary simply by consolidating the loans?
Last edited by Bec; 06/20/13 05:03 PM.
_________________________
Go Packers

Return to Top

Moderator:  Andy_Z