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#1911941 - 04/04/14 06:50 PM RESPA-Vacant Land
gms2013 Offline
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Joined: May 2013
Posts: 76
KY
We seem to be confused about exactly what is exempt from RESPA and what isn't when it comes to vacant or unimproved land. If we have someone purchasing a lot and this will be a 1 year loan would this be considered exempt?
I have always thought if the customer may construct or purchase a mobile home using a portion of the proceeds RESPA would apply...

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RESPA
#1911957 - 04/04/14 07:08 PM Re: RESPA-Vacant Land gms2013
RR Joker Offline
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The Swamp
Quote:
using a portion of the proceeds


If this is the case and no other exemption applies, then it is subject to RESPA.
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#1911965 - 04/04/14 07:13 PM Re: RESPA-Vacant Land gms2013
swiggles Offline
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swiggles
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Vacant land is an "unless" exemption. And the term is not "may", it's "will." And also "using the proceeds of the loan" and a lien is taken on the property.

(4) Vacant land. Any loan secured by vacant or unimproved property, unless within two years from the date of the settlement of the loan, a structure or a manufactured home will be constructed or placed on the real property using the loan proceeds. If a loan for a structure or manufactured home to be placed on vacant or unimproved property will be secured by a lien on that property, the transaction is covered by this part.
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#1911971 - 04/04/14 07:18 PM Re: RESPA-Vacant Land gms2013
rlcarey Online
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rlcarey
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Galveston, TX
I am confused. If the lot costs $50,000 and you are lending them $32,500 to purchase the property (maximum supervisory LTV on raw land), how can some of the proceeds be used to construct a dwelling or purchase a mobile?

If this is not the scenario, then please explain.
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#1911983 - 04/04/14 07:27 PM Re: RESPA-Vacant Land gms2013
gms2013 Offline
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Joined: May 2013
Posts: 76
KY
A part of the proceeds will not be used to construct or place a mobile home on the property. The loan is only for purchasing the lot. A home will be constructed on the property at a later date but, not with a portion of the proceeds from this loan.
So my understanding is this is not RESPA?

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#1911987 - 04/04/14 07:28 PM Re: RESPA-Vacant Land gms2013
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
Correct.
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

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#1911991 - 04/04/14 07:34 PM Re: RESPA-Vacant Land gms2013
gms2013 Offline
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Joined: May 2013
Posts: 76
KY
thank you very much

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