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#1891687 - 01/29/14 05:16 PM Abundance of Caution
Patricia Offline
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Joined: Mar 2011
Posts: 335
Kansas
I have completed a search on BOL for AOC I think I have found the answer but just want to be sure I understand: Situation: Borrower purchasing primary residence on 40 acreas, does not qualify on own so dad is going to also be on the loan and giving his current home as an AOC. So I am thinking that RESPA and REG Z do not apply to the home being purchased on the 40 acres but RESPA and REG Z (including ROR) would apply on the property being taken as AOC. Right?

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#1891697 - 01/29/14 05:33 PM Re: Abundance of Caution Patricia
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,223
Galveston, TX
The regulations either apply or they do not. They cannot apply separately to collateral.

By the way, this is not AOC if you would not make the loan without the other property.

It also is a terrible idea from a bank perspective. You are putting both the son and father in jeopardy of losing their primary residences. Why would you make such a loan to someone who does not qualify??
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#1891733 - 01/29/14 06:35 PM Re: Abundance of Caution Patricia
Skittles Offline
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Skittles
Joined: Sep 2002
Posts: 13,965
TN
As has been stated previously, the ONLY thing AOC gets the bank out of (if done properly) is the appraisal. ALL other regulations apply.
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