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#205012 - 06/28/04 03:34 PM What disclosures to give...
Anonymous
Unregistered

Purpose ~ To purchase primary residence.
Security ~ Other residence (not the primary residence).
I am thinking the following disclosures apply:
RESPA, TIL, HMDA, Flood, Appraisal. I am not so sure about the written application. Any guidance would be appreciated.

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Lending Compliance
#205013 - 06/28/04 03:52 PM Re: What disclosures to give...
Andy_Z Offline
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Andy_Z
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Posts: 27,246
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Check out this matrix from David Dickinson's Bankers Compliance Consulting.

A more extensive set of matrices is available in the Banker Store covering this and many other topics.

These are great reference tools.
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AndyZ CRCM
My opinions are not necessarily my employers.
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#205014 - 06/28/04 03:58 PM Re: What disclosures to give...
Anonymous
Unregistered

I've looked at various matrices, including Kirchman and BCC. They appear to be conflicting.

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#205015 - 06/28/04 04:09 PM Re: What disclosures to give...
Andy_Z Offline
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Andy_Z
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Posts: 27,246
On the Net
What are the cites for the conflicts?
_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#205016 - 06/28/04 04:24 PM Re: What disclosures to give...
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,249
Bloomington, IN
I'd be interested in the conflicts you noticed also, but to answer your question a written application would not be a regulatory requirement. Reg B only requires a written application when the loan request is to purchase or refinance the applicant's primary dwelling and the loan will be secured by the primary dwelling.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#205017 - 06/28/04 04:39 PM Re: What disclosures to give...
KSalberta Offline
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KSalberta
Joined: Jan 2003
Posts: 150
GA
David's grid is very detailed, and has commentary on the back.

You don't give enough detail about the transaction for one of the BOL gurus to answer you accurately.

From the little information you give, I can't even figure out if this is a bridge loan or a residential mortgage transaction. If no security interest is being taken in the purchased residence, it doesn't meet the Reg Z definition of a residential mortgage transaction.

Rescission might apply, or it might not. If the residence securing the loan is the consumer's current principal dwelling, see the following from the commentary to 226.23.

3. Principal dwelling. A consumer can only have one principal dwelling at a time. (But see comment 23(a)(1)4.) A vacation or other second home would not be a principal dwelling. A transaction secured by a second home (such as a vacation home) that is not currently being used as the consumer's principal dwelling is not rescindable, even if the consumer intends to reside there in the future. When a consumer buys or builds a new dwelling that will become the consumer's principal dwelling within one year or upon completion of construction, the new dwelling is considered the principal dwelling if it secures the acquisition or construction loan. In that case, the transaction secured by the new dwelling is a residential mortgage transaction and is not rescindable. For example, if a consumer whose principal dwelling is currently A builds B, to be occupied by the consumer upon completion of construction, a construction loan to finance B and secured by B is a residential mortgage transaction. Dwelling, as defined in 226.2, includes structures that are classified as personalty under state law. For example, a transaction secured by a mobile home, trailer, or houseboat used as the consumer's principal dwelling may be rescindable.

4. Special rule for principal dwelling. Notwithstanding the general rule that consumers may have only one principal dwelling, when the consumer is acquiring or constructing a new principal dwelling, any loan subject to Regulation Z and secured by the equity in the consumer's current principal dwelling (for example, a bridge loan) is subject to the right of rescission regardless of the purpose of that loan. For example, if a consumer whose principal dwelling is currently A builds B, to be occupied by the consumer upon completion of construction, a construction loan to finance B and secured by A is subject to the right of rescission. A loan secured by both A and B is, likewise, rescindable.

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#205018 - 06/28/04 04:56 PM Re: What disclosures to give...
Anonymous
Unregistered

Thank you for your responses. It is a bridge loan.
The Kirchman checklist doesn't take into consideration the collateral. The Kirchman quick-reference guide indicates all disclosures (except ROR) for puchase money mortgages and the BCC Matrix provides for different characteristics about the use of the security and the proceeds. Just unsure, as they do appear to be different.

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#205019 - 06/29/04 02:14 AM Re: What disclosures to give...
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,754
Central City, NE
We elected not to include bridge loans on the BCC Real Estate Matrix as there are too many variables:
Is is temporary only (loan paid off when current home is sold) or is it permanent financing?
Is is secured only by the current dwelling, only by the new dwelling or by both?

We want to keep the Matrix to 1 page so this creates too many rows.

Now to your question:
RESPA and P-TIL disclosures apply if you are providing permanent financing.
Flood applies to every dwelling.
HMDA applies if it is not temporary financing.
Application is required.
RofR is required if you have the borrower's current principal dwelling.
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David Dickinson
http://www.bankerscompliance.com

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