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#2014671 - 05/18/15 04:52 PM 25 Acre RESPA exempt
Web Offline
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I have a loan on 57 acres of farmland with building. The customer does not farm the property so I think RESPA is exempt (don't need to issue GFE), but all REG Z disclosures would apply. Is this accurate?

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#2014673 - 05/18/15 05:04 PM Re: 25 Acre RESPA exempt Web
swiggles Offline
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swiggles
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Real property containing 25 acres or more is exempt from RESPA. If exempt from RESPA, then early TIL doesn't apply either.

You said the property is "farmland with a building." If "the building" isn't a dwelling, RESPA wouldn't apply anyway....regardless of acreage.
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#2014686 - 05/18/15 05:30 PM Re: 25 Acre RESPA exempt Web
Web Offline
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it is farmland with a house where the applicant lives as primary residence. I see RESPA follows Reg Z on business purpose, but don't see where the 25 acres + is exempt from Reg Z just because RESPA exempts it.

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#2014689 - 05/18/15 05:40 PM Re: 25 Acre RESPA exempt Web
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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Until August 1, 2015, you just need a final TILA under Z when there is no residence involved (hence to reference to RESPA).

After August 1, you need both Loan Estimate and Closing Disclosure.

This all assumes a consumer purpose, of course.
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#2014690 - 05/18/15 05:41 PM Re: 25 Acre RESPA exempt Web
NSF, CRCM Offline
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VA
Not exempt from REG Z. Just exempt from the Early TIL. Read 1026.19(a)(1)(i).
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#2014691 - 05/18/15 05:45 PM Re: 25 Acre RESPA exempt Web
John Burnett Offline
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John Burnett
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Cape Cod
The loan would still be a consumer-purpose loan and be subject to Regulation Z. However, the early TIL disclosures required by current 1026.19(a) would not apply because they hinge on RESPA applicability.

If you get an application like this on or after 8/1/15, the 25-acre RESPA exemption will be gone, but that wouldn't matter, because the TRID rules will apply, and you'd have to provide both a Loan Estimate and Closing Disclosure, whether or not there are buildings (or anything else!) on the land.
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#2014726 - 05/18/15 06:44 PM Re: 25 Acre RESPA exempt Web
Web Offline
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Why don't I issue an early TIL? I understand the GFE being a RESPA disclosure but the Early TIL is a REG Z disclosure so why don't I issue that?

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#2014746 - 05/18/15 07:11 PM Re: 25 Acre RESPA exempt Web
swiggles Offline
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Read Reg Z 1026.19(a) as John pointed out.

(a) Mortgage transactions subject to RESPA. (1)(i) Time of disclosures. In a mortgage transaction subject to the Real Estate Settlement Procedures Act (12 U.S.C. 2601 et seq. ) that is secured by the consumer's dwelling, other than a home equity line of credit subject to §1026.40 or mortgage transaction subject to paragraph (a)(5) of this section, the creditor shall make good faith estimates of the disclosures required by §1026.18 and shall deliver or place them in the mail not later than the third business day after the creditor receives the consumer's written application.

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#2014771 - 05/18/15 08:00 PM Re: 25 Acre RESPA exempt Web
John Burnett Offline
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John Burnett
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Cape Cod
That's the way the requirement, part of the Mortgage Disclosure Improvement Act (MDIA), was set up, several years ago. Some banks (perhaps yours) decided to do early TILs whether or not RESPA is implicated. Perhaps that's the reason for your concern?
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