Why does the regulation exempt purchase money loans for vehicles and purchase money loans for personal property? Aren't vehicles personal property?

Why is the distinction made that motor homes, RVs, golf carts, and motor scooters are not vehicles? Aren't they all personal property?

That was what I was thinking when I read that part as well. I thought the RV, golf cart etc would be personal property... I was not sure why they were making that "clarification" on what was a vehicle.

I am still wondering why they didn't remove Land Loans from the rule.

Because that would have made it just too easy!

I just need to know if I am misunderstanding the meaning of personal property.

I do not understand the definition of personal property under the rule either. Is a rental dwelling 1-4 non-owner occupied covered?

No, dwelling-secured loans are exempt (not to mention that if for the purchase or maintenance of the rental, it would be exempt from Reg. Z, and thus, again exempt from the MLA).

The legal definition of personal property is anything besides land that may be subject to ownership. But since they have now stated it doesn't include RV, motor homes, golf cars, or scooters who knows what definition they are going by.

Wait, ...what? Are you guys thinking RV, motorhome, etc loans are now covered loans...?

I think they were saying RV, motor homes, golf carts or scooters were excluded from the vehicle definition and exception but not the personal property exception.

Still not sure why those are excluded from the definition of vehicle or why vehicle and personal property are separated. But I am pretty sure that purchase of all of these items are still going to be included under the exemptions.

No, I believe purchase loans for RVs, motor homes, golf carts and scooters, along with cars are excluded from the covered loan definition. I'm just trying to understand why vehicles are mentioned separately from personal property in the regulation. I feel like I'm missing something.

Covered: "vehicle" means any self-propelled vehicle primarily used for personal, family, or house hold purposes for on-road transportation. Examples: cars, vans, trucks, motorcycles

Not Covered: The term does NOT include motor homes, RVs (ex. boats, dirt bike), golf carts, or motor scooters.

Right. RV's etc. are EXCLUDED from the definition of vehicle but are considered personal property thus falling under that exemption if the loan is to purchase the collateral.

Example:
Covered borrower wants a loan to buy a new camper trailer. The camper will secure the loan. The loan is ONLY to purchase the camper. This will be an excluded loan because the camper is personal property and is securing the purchase loan. So even though it fails the vehicle exemption test, it's still exempt under the personal property test.

Does that help?

I originally asked this question because I'm trying to decide what I want to say in training. I like to use as few words as possible and still get the point across. My thought is vehicles are personal property. When I state the types of loans that are excluded I'm going to say: "Purchase of personal property secured by the property being purchased." I don't want to state the same thing again but insert the word "vehicle" in place of "personal property" because I've always considered vehicles personal property. Of course there will be an example with a car and another with a snow mobile or something.

I was just wondering why the reg is written the way it is.

Now there is another wrench in explaining that purchasing a car, securing the loan with the purchased car, and refinancing that snowmobile, is covered.

I've chalked the lack of clarity up to the fact that this is a DoD rule rather than a banking rule. This was written by folks that don't understand all the ins and outs of banking and loans. It makes sense to me that they've written a rule that needs a lot more clarification than they've already issued and brought out more unintended consequences than we normally see.

What about a boat loan? It seems that all other modes of transportation are have been discussed, but not water craft.

That would fall under the personal property exemption. As long as the funds are being used to purchase the watercraft that will secured the loan, it would NOT be a covered loan.

I know we are all in agreement that lot loans are not covered by the real estate dwelling exception. So....
If lot loans are also not considered personal property that would imply there is no exemption at all from the MLA requirements.

With this understanding, all lot loans would be covered including lot loans to purchase a lot secured by that lot, cash out lot loans, refinanced lot loans, etc.

If they're for consumer purpose, yes.

Agree with raitchjay.

It's my understanding as well that lot loans are covered. As for the distinction made for "vehicles", I think the intent was to address the class of creditors that remain restricted from refinancing or securing a loan secured by a vehicle title.

Some things are not meant to be understood. Besides, this is the government we are talking about.