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#2039722 - 09/21/15 08:04 PM Home Equity- Land only
Dodge Offline
100 Club
Joined: Mar 2010
Posts: 241
Sorry in advance for the stupid question.

Consumer purpose loan secured by vacant land that has no prior liens on it. Customer is taking equity out of the land to pay off credit cards. Under the TRID rules, the purpose stated on the Loan Estimate/Closing Disclosure is "Home Equity"; even though, there is no home involved.

I told my boss that and he thinks that I missed something in the regulation...

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TRID - TILA/RESPA Integrated Disclosures Rule
#2039723 - 09/21/15 08:07 PM Re: Home Equity- Land only Dodge
raitchjay Offline
Power Poster
Joined: Oct 2009
Posts: 8,763
Either something the CFPB didn't anticipate, or a road they didn't want to go down i guess....but i'm with you......seems like "Home Equity" is your only choice. Purchase, refinance, nor construction work for the purpose, so that seems to be all you're left with.
I'm fixin' to fix that.

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#2039727 - 09/21/15 08:15 PM Re: Home Equity- Land only raitchjay
Red Raiders Offline
Diamond Poster
Red Raiders
Joined: May 2013
Posts: 1,055
Compliance Land
This is from 1026.37(a)(9) and tells you how purpose must be completed:

Purpose. Applicant's intended use for the loan, using one of the following:
(i) Purchase. If to purchase property identified in 1026.37(a)(6);
(ii) Refinance. If not for “Purchase”, and if refinancing an existing obligation that is secured by
property identified in 1026.37(a)(6);
(iii) Construction. If not for “Purchase” or “Refinance” and the loan is to finance the initial
construction of a dwelling on the property identified in 1026.37(a)(6).
(iv) Home equity loan. If not for “Purchase”, “Refinance” or “Construction”.

As mentioned above, if it's not a purchase, refinance or construction, your only option is home equity. Makes sense, right? smile
How long until retirement?? smile

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#2039896 - 09/22/15 04:02 PM Re: Home Equity- Land only Dodge
Jerod Moyer Offline
Platinum Poster
Jerod Moyer
Joined: Oct 2005
Posts: 667
Sioux Falls, SD
Home Equity all the way in this specific scenario, as stated by Raiders2000 and Raitchjay. I know it's weird, there's no house but it is Home Equity.
Jerod Moyer

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#2039897 - 09/22/15 04:03 PM Re: Home Equity- Land only Dodge
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,684
Cape Cod
The Bureau could have easily avoided having lenders scratching their heads over this by using "Other" as the purpose label for the last option.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8

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#2039908 - 09/22/15 04:39 PM Re: Home Equity- Land only Dodge
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,281
Exactly, and that is how people should think of it. It is "everything that doesn't fit in the other 3 categories".
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy

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