Skip to content
BOL Conferences
Thread Options
#2077608 - 05/09/16 03:16 PM Commercial loan turned TRID
smalloperations Offline
New Poster
Joined: Mar 2009
Posts: 24
west texas area
Looking for some opinions here.

Texas R/E Transaction.

Customer came in and wanted to apply for a loan. He was purchasing a 5 acre plot (no structures). He didn't have a specific use for the land. He just wanted to buy it so his dad could pass some time cleaning up the property. On the app he listed his current address as owned.

Well appraisal was ordered and docs were ready to be sent over to Closing agent. Doc Prep started working on the Homestead Affidavit, then that's where things came unglued. It was discovered that the house he built and paid cash for was built on land he presumed was "deeded' to him. The land was deeded in a life estate and he would not fully owned it till his father passed away.

So now we have an applicant that does not own any other property. By default of not owning any other land we assume the purchasing property is now protected by homestead.

If that's the case. we are now looking at a TRID transaction. We are well away from our LE time frame.

One solution brought to the table is to start the clock from the time of this discovery and issue the LE. The other solution suggested is to deny/withdraw the loan and submit new app.

My opinion is to follow the first solution in "Good Faith" and issue the LE and attached a Memo to the file.

Return to Top
TRID - TILA/RESPA Integrated Disclosures Rule
#2077613 - 05/09/16 03:31 PM Re: Commercial loan turned TRID smalloperations
JC (Darth HMDA) Offline
Diamond Poster
JC (Darth HMDA)
Joined: Dec 2013
Posts: 1,399
CA
I'm not familiar with the homestead laws but if we had a commercial loan that we discovered was subject to TRID we would decline and start an application with the mortgage department. That's just my opinion.

Best of luck.
_________________________
The opinions expressed are mine, do not represent the opinions of my employer, and they are not to be taken as legal advice.

Return to Top
#2077615 - 05/09/16 03:33 PM Re: Commercial loan turned TRID smalloperations
#12 Offline
Diamond Poster
Joined: Jun 2005
Posts: 1,343
IMHO, it should have been a TRID loan from the start. Doesn't sound like there was a business purpose to the purchase, so you had a closed end, consumer purpose loan, secured by dirt. That is covered under the TRID rules.
_________________________
CRCM

Return to Top
#2077616 - 05/09/16 03:33 PM Re: Commercial loan turned TRID smalloperations
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
I'm confused where the commercial purpose comes in. Unless this application began before 10/3/15 the loan request was initially subject to TRID - it appears to be for a consumer purpose secured by real property.

As for your life estate dilemma you really need to speak to your attorney.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#2077620 - 05/09/16 03:44 PM Re: Commercial loan turned TRID smalloperations
smalloperations Offline
New Poster
Joined: Mar 2009
Posts: 24
west texas area
Let me add to the "no specific use" comment.

Some other thoughts he had for it after it was cleaned up was parking his business equipment on or letting the stock show goats roam around.

The fact still remains that he originally claimed his current address as his "home".

Return to Top
#2077692 - 05/09/16 06:44 PM Re: Commercial loan turned TRID smalloperations
RR Joker Offline
10K Club
RR Joker
Joined: Nov 2002
Posts: 20,656
The Swamp
"Home" is meaningless. You must know a purpose during the initial application process. It could well be a business purpose if he for sure intended to use it to house stock (income producing) or park legit business equipment (as opposed to personal).

But the whole fact remains, was the purpose personal (to let his dad piddle around on it) or business. That is the key to whether Reg Z applies or not.
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

Return to Top