Thread Options
#1847742 - 08/30/13 03:38 PM TIL on Ranch Property?
QueenBB Offline
100 Club
Joined: Jan 2006
Posts: 190
TX
We have MANY customers who are purchasing land (well over 25 acres) with some type of residence on it for a "business" purpose - however, the "business" is definitely not their line of real business. The "residence" is just a house that the customer may live in occasionally - or not. Would this purchase required a final TIL?

Return to Top
Lending Compliance
#1847750 - 08/30/13 03:52 PM Re: TIL on Ranch Property? QueenBB
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
Without details on the type of business, it is hard to answer. The bank has to do the analysis and determine if the loan is business purpose or not...nothing to do with collateral.

People can have more than one business.

If it is determined to be business purpose (review the commentary to Reg Z for points to consider) then the loan is not subject to Reg Z.

If the loan is determined to be consumer purpose, those rules will apply as applicable.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

Return to Top
#1847771 - 08/30/13 04:11 PM Re: TIL on Ranch Property? Kathleen O. Blanchard
QueenBB Offline
100 Club
Joined: Jan 2006
Posts: 190
TX
The business would be typical ranching activity - possibly used as deer lease or raising sheep. The loans are made to doctors and lawyers, so this is definitely providing much income for them.

Return to Top
#1847774 - 08/30/13 04:17 PM Re: TIL on Ranch Property? QueenBB
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
If the purchaser is spending a lot on this, and is expecting the venture to be money making, not just a tax write off sitting there to be used occasionally for vacation or to make some money when the land is sold sometime down the road, a bank could very well determine this is a business purpose loan and no consumer disclosures would apply.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

Return to Top

Moderator:  Andy_Z