Father is our current customer on a loan ( his primary residence and way back when made it was a purchase transaction)... father's health is not good so he wants to have daughter added to note & quit claim deed - she will continue to live in her own primary residence. My question, we will be doing this as a Change in Terms to add her, we have rec'd an application from her etc. .. The note terms will remain the same for father, and no fees assessed. Since she is assuming this loan and it is not her primary residence I do not feel TRID disclosures are required. Am I correct?

This is my rationale:
20(b) Assumptions

1. General definition. i. An assumption as defined in §1026.20(b) is a new transaction and new disclosures must be made to the subsequent consumer. [b]An assumption under the regulation requires the following three elements:

A. A residential mortgage transaction. ( this is not correct for the new borrower)

B. An express acceptance of the subsequent consumer by the creditor.

C. A written agreement.
Therefore only two out of three ... no TRID.

Your help is appreciated[/b]

Since the daughter will not be living the home as her primary residence I agree this would not be a RMT and TRID would not apply.

Thank you!

We currently have a loan to an LLC and the manager of the LLC resides in the property as his primary residence. Since their accountant has told them the loan needs to be in their personal name for tax reasons the lender wants the individual to assume the debt of the LLC. Based on the above I think TRID would apply. Am I correct?

Yes. You start from the application and go through the whole series of LE, .... Closing and Closing disclosure. But only if there is a conveyance of the property from the LLC to the manager.

If the LLC owns the real estate and the bank agrees to substitute the manager for the LLC as the obligor and there's no change in title ... is there a refinancing? Can this be done under your state's laws?

The property will be conveyed from the LLC to the individual. I believe the lender thinks the assumption will prevent him from TRID and ATR. I am of the opinion both will apply.

Although they use the term “other consumer” in the commentary, I doubt the FRB contemplated an assumption of a loan from a business entity by a consumer when they wrote this. It appears from the description of the transaction that it meets all of the elements of an assumption under 1026.20. Also, I think a review of the note and deed would be in order to ensure that any terms or conditions that would not be allowed in a consumer contract were not present in the commercial note and security agreement that is being assumed.

Official Interpretation

20(b) Assumptions

2. Existing residential mortgage transaction. A transaction may be a residential mortgage transaction as to one consumer and not to the other consumer. In that case, the creditor must look to the assuming consumer in determining whether a residential mortgage transaction exists. To illustrate: The original consumer obtained a mortgage to purchase a home for vacation purposes. The loan was not a residential mortgage transaction as to that consumer. The mortgage is assumed by a consumer who will use the home as a principal dwelling. As to that consumer, the loan is a residential mortgage transaction. For purposes of §1026.20(b), the assumed loan is an “existing residential mortgage transaction” requiring disclosures, if the other criteria for an assumption are met.

Good point. Thanks guys!