Land loans are considered investment loans at the bank so they are classified as commercial loans. Sometimes the land is used for agricultural purposes, or just as investments, sometimes to build in the future.

So, if the bank classifies these loans as commercial loans... but the MLA considers them as covered loans, do we have to change the classification of these loans?

Commercial & Agriculture loans are exempt from Reg Z, so therefore MLA would not apply.

If the land loan is a Consumer purpose, Reg Z applies & so does MLA.

Yeah, that's what I understand... I read the following on an article:

The final rule preserves exemptions for residential mortgages and vehicle-secured purchase loans. Note, a lot loan or loan for vacant land not secured by a dwelling is a covered loan under the final rule.

That's why I got confused.

If the plan is to build a principal dwelling or vacation home on the empty lot in the future, then that would be a consumer purpose loan with all the applicable consumer regs (TRID & MLA).

Say WHAT? The bank decides to classify all land loans as commercial? Oh my oh my. That's really very scary. Only your borrower can disclose what their intentions for the use of the land are going to be! (business, ag, personal).