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#2058337 - 01/13/16 04:00 PM TRID Purpose help!
cle Offline
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Customer is paying off contract for deed, consolidating some debt and receiving cash out for home improvement. We sell our loans to Freddie Mac and is considered a refinance. For HMDA purposes we classify them as purchases. I am so confused.
For TRID what is the purpose?

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TRID - TILA/RESPA Integrated Disclosures Rule
#2058349 - 01/13/16 04:31 PM Re: TRID Purpose help! cle
swiggles Offline
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My vote....purchase.....may get shot down, though....LOL
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#2058409 - 01/13/16 07:14 PM Re: TRID Purpose help! cle
Truffle Royale Offline

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Lots of discussion on this. First, you MUST give RoR on this loan. 1026.2(a)(24)(5). Acquisition. i. A residential mortgage transaction finances the acquisition of a consumer's principal dwelling. The term does not include a transaction involving a consumer's principal dwelling if the consumer had previously purchased and acquired some interest to the dwelling, even though the consumer had not acquired full legal title.

Subsection (ii). Examples of new transactions involving a previously acquired dwelling include the financing of a balloon payment due under a land sale contract ..........However, the rescission rules of ยงยง1026.15 and 1026.23 do apply to these new transactions.

Fwiw, we report payoff of land contracts as a refinance especially if the contract is recorded which puts the borrower on title.

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#2058418 - 01/13/16 07:22 PM Re: TRID Purpose help! cle
Kat Offline
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Montana
Based on RoR requirement and the definition of "Acquisition" above, I would go with refinance. smile

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#2058584 - 01/14/16 02:43 PM Re: TRID Purpose help! cle
cle Offline
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Thanks, Truffle. We are definitely giving the RoR. I think we will use refinance as purpose.

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#2058598 - 01/14/16 03:06 PM Re: TRID Purpose help! cle
Jerod Moyer Offline
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Sioux Falls, SD
IMO based what's been presented:

If there's a title transfer = Purchase
If no Title Transfer = Refinance
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#2061935 - 02/02/16 08:23 PM Re: TRID Purpose help! cle
David Offline
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Auburn, ME
Purchase or refi? We have a borrower who owns the land, the land is currently encumbered and our loan will payoff current lien and payoff cost of adding modular home to the site.

Is this a refi or purchase for TRID?

If it is a purchase how do we disclose the loan payoff on the standard purchase CD?

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#2061940 - 02/02/16 08:38 PM Re: TRID Purpose help! cle
John Burnett Offline
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Cape Cod
Refi. There's no title being acquired to the land and a loan encumbering the land is being paid off.
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#2061941 - 02/02/16 08:40 PM Re: TRID Purpose help! cle
David Offline
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Auburn, ME
Thank you!!

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#2092746 - 08/11/16 05:23 PM Re: TRID Purpose help! cle
Dodge Online
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Working on a Loan Estimate for customer who paying off a contract for sale. We are coding the loan as purchase because title is changing. The customer has paid over $6000 through years to the owner for the house. How do I show that on the LE? Adjustments and other credits?

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#2093228 - 08/15/16 04:08 PM Re: TRID Purpose help! cle
brad swanson Offline
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I understand from the foregoing that Purchase = transfer of title. Refinance = no transfer of title. Therefore, financing the payoff of a Contract for Deed would be a purchase since the title will transfer. It is inherent in the title of the document: Contract for Deed. Title transfers by deed upon payoff of the contract. Therefore on the LE the purpose would be purchase, correct? I seem to be reading differing opinions.

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#2093447 - 08/16/16 03:13 PM Re: TRID Purpose help! cle
RR Joker Offline
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That's how I've done it gaints06.

I have called them purchases, brad swanson...It might matter whether or not everything was recorded. In some instances, title transfer like a normal purchase...but seems that usually, the current owner retains title until the buyer either pays it off or obtains other financing.
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#2093476 - 08/16/16 04:12 PM Re: TRID Purpose help! cle
Truffle Royale Offline

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If the land contract is recorded, the borrower has already gained interest in the property. The land contract is akin to a mortgage held by a private person. If the borrowers don't pay, the mortgagor gets the house. We treat these as refinances. You can go either way but you need to be consistent and able to back up your choice.

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#2093636 - 08/17/16 04:33 AM Re: TRID Purpose help! cle
rlcarey Online
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Galveston, TX
You need to refer to State law to find out if a land contract grants them a ownership interest.
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