We are financing the purchase of a mobile home for a customer and we are not taking any dirt as collateral, just the mobile home. I know that this transaction is subject to REG Z and HMDA but not RESPA. My question is if the transaction is a HPML and escrows are required, do we need to escrow for property taxes, if the land that the mobile home is placed on is not owned by the borrower?

We had a similar situation recently--and we came to the following conclusion:

Per 12 CFR 1026.35 a HPML is a closed-end consumer credit transaction secured by a consumer's principal dwelling with an annual percentage rate that exceeds the average prime offer rate . . . . . etc.

If the mobile home is their primary residence, escrow is required.

If they are not responsible for real estate taxes, due to them not owning them, then no escrow for them. However, some states have Mobile Home Taxes, you would escrow for them, as well as insurance and flood, if applicable.

So for this transaction since the loan is an HPML if the loan matures in 7 years but is based on a 20 year amortization then you would have to use the balloon payment to see if they qualify?