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#2019986 - 06/11/15 08:29 PM Purchase a 1-4 Family for Children
Anonymous
Unregistered

Is a parent purchasing a 1-4 family house for their children to live in the US would be subject to:

1. HMDA? (I know it's yes)
2. Reg B? I say yes...
3. Reg Z? I'm not sure but think it is yes..
4. RESPA? Same as Reg Z.

Thanks

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#2020001 - 06/11/15 09:37 PM Re: Purchase a 1-4 Family for Children Anonymous
Anonymous
Unregistered


Kind of depends - is this an investment property/commercial purpose? IF yes - REG Z & RESPA would not apply


REG Z - loan made to a Consumer & for a Consumer Purpose = Yes
RESPA - loan made to a Consumer & for a Consumer Purpose & Secured by Real Estate - yes

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#2020003 - 06/11/15 09:41 PM Re: Purchase a 1-4 Family for Children Anonymous
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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Posts: 21,277
Unless it is a rental ( charging the kids rent), it is consumer purpose subject to Z and RESPA.

HMDA yes
B yes
Flood yes
Z yes
RESPA yes
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#2020006 - 06/11/15 09:43 PM Re: Purchase a 1-4 Family for Children Anonymous
Anonymous
Unregistered

It is what I said above.

Persons in another country that has ties to our parent bank wants to purchase a 1-4 house for their child(ren) to live in when they go to school in the US.

The person that owns it will not live there but the child(ren) or spouse will when they go to school.. After the child graduates they will either rent it out or sell.

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#2020008 - 06/11/15 09:46 PM Re: Purchase a 1-4 Family for Children Anonymous
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
That is consumer purpose.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#2020011 - 06/11/15 10:08 PM Re: Purchase a 1-4 Family for Children Anonymous
Anonymous
Unregistered

What is considered investment (non-consumer) purpose when you purchase a 1-4 family?

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#2020012 - 06/11/15 10:12 PM Re: Purchase a 1-4 Family for Children Anonymous
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
A rental property.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#2020013 - 06/11/15 10:14 PM Re: Purchase a 1-4 Family for Children Anonymous
Anonymous
Unregistered

Yes... So if the owner doesn't live there and charges the children rent and then sells the property after they leave than it is considered investment?

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#2020015 - 06/11/15 10:21 PM Re: Purchase a 1-4 Family for Children Anonymous
Anonymous
Unregistered

Another wrinkle... we are a wholesale designated bank and currently we do residential mortgages on an accommodation basis and don't market in the US and don't take customer's off the street but only our employees or employees of our correspondent banks in the US.

However, our home office wants to be able to do this for our overseas branch customers and affiliate employees and it could possibly increase the Residential Mortgage loans from 20 a year or less to over 100, will this jeopardize our wholesale designation?

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#2020016 - 06/11/15 10:35 PM Re: Purchase a 1-4 Family for Children Anonymous
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
If they purchased the property as a rental and the first tenants were their children, with a lease and rental payments, it would be business purpose.

Review the commentary re rental real estate.

http://www.bankersonline.com/regs/12-1026/12-1026-003.html

However, you should review this with legal counsel:

Official Interpretations of this section.

1(c) Coverage

1. Foreign applicability. Regulation Z applies to all persons (including branches of foreign banks and sellers located in the United States) that extend consumer credit to residents (including resident aliens) of any state as defined in ยง1026.2. If an account is located in the United States and credit is extended to a U.S. resident, the transaction is subject to the regulation. This will be the case whether or not a particular advance or purchase on the account takes place in the United States and whether or not the extender of credit is chartered or based in the United States or a foreign country. For example, if a U.S. resident has a credit card account located in the consumer's state issued by a bank (whether U.S. or foreign-based), the account is covered by the regulation, including extensions of credit under the account that occur outside the United States. In contrast, if a U.S. resident residing or visiting abroad, or a foreign national abroad, opens a credit card account issued by a foreign branch of a U.S. bank, the account is not covered by the regulation.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#2020017 - 06/11/15 10:37 PM Re: Purchase a 1-4 Family for Children Anonymous
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
You should also discuss the impact on the wholesale designation with counsel and your regulator. That is nothing to gamble with.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#2020027 - 06/12/15 11:52 AM Re: Purchase a 1-4 Family for Children Anonymous
Anonymous
Unregistered

Thank You very much Kathleen for your help!

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