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#2167749 - 03/13/18 01:06 PM Land interest choices - Manufactured housing
RR Joker Offline
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Okay, I've looked at the definitions for Direct, Indirect, Paid and Unpaid leaseholds and just don't see an exact fit for my situation and am looking for opinions.

Situation:

I have a loan to a business. The land and home is in the name of an individual [who owns or is part owner of the business]. They have hypothecated the collateral and they are a guarantor on the note, not a borrower.

What the heck do I have? crazy FWIW, the best fit appears to be Unpaid Leasehold.
Last edited by RR Joker; 03/13/18 01:07 PM.
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#2167751 - 03/13/18 01:13 PM Re: Land interest choices - Manufactured housing RR Joker
rlcarey Online
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Why do you think a leasehold is involved?
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#2167768 - 03/13/18 01:59 PM Re: Land interest choices - Manufactured housing RR Joker
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I don't. But it fits the best, does it not? The borrower has no direct ownership, it's not the definition of Indirect, there is no lease for a Paid leasehold and all that is left is Unpaid leasehold which is pretty generic.

Land Property Interest. Information about the applicant’s or borrower’s property interest in the land on which the Manufactured Home is or would have been located, reported as one of the following:
a. Direct ownership. An applicant or borrower has a direct ownership interest in the land on which the Dwelling is or is to be located when it has more than a possessory real property ownership interest in the land, such as fee simple ownership. Comment 4(a)(30)-5.
b. Indirect ownership. Indirect land ownership can occur when the applicant or borrower is or will be a member of a resident-owned community structured as a housing cooperative in which the occupants own an entity that holds the land underlying the Manufactured Home community. In such communities, the applicant or borrower may still have a lease and pay rent for the lot on which his or her Manufactured Home is or will be located, but the property interest type for such an arrangement should be reported as indirect ownership if the applicant is or will be a member of the cooperative that owns the Manufactured Home community’s underlying land. If an applicant resides or will reside in such a community but is not a member, the property interest type should be reported as a paid leasehold. Comment 4(a)(30)-1.
c. Paid Leasehold. For example, a paid leasehold occurs when a borrower locates the Manufactured Home on a lot in which the borrower does not have an ownership interest, the borrower has a written lease for the lot, and the lease specifies rent payments. Comment 4(a)(30)-2.
d. Unpaid Leasehold. For example, an unpaid leasehold occurs when the borrower locates the Manufactured Home on land owned by a family member, does not have a written lease, and does not have an agreement regarding rent payments. Comment 4(a)(30)-2.
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#2167769 - 03/13/18 02:05 PM Re: Land interest choices - Manufactured housing RR Joker
rlcarey Online
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The land and home is in the name of an individual

OK - I guess I am confused - the home is a manufactured home? and person #1 that actually owns the land and home has pledged it for person #2 in order for person #2 to get a loan? Person #1 that owns the home is also guaranteeing the loan?

Unless person #1 getting the loan actually owns something, how is a lease involved?

Sounds to me that it is just non-owner occupied property.
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#2167770 - 03/13/18 02:08 PM Re: Land interest choices - Manufactured housing RR Joker
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The dwelling is a manufactured home.

The loan is in the name of ABC Investments Group

The property is in the name of John Doe.

John is not a borrower. He is a guarantor only.

There is not an option for NA on the ownership question. I have to pick something.
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#2167771 - 03/13/18 02:10 PM Re: Land interest choices - Manufactured housing RR Joker
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And yes, I'm frustrated. I have not had one clean loan in my HMDA 2018 review yet and man is it time consuming! cry
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#2167773 - 03/13/18 02:13 PM Re: Land interest choices - Manufactured housing RR Joker
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Who owns the manufacture home - ABC Investments Group? Then it is direct ownership.
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#2167777 - 03/13/18 02:18 PM Re: Land interest choices - Manufactured housing RR Joker
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No. And the land is what you are having to answer the ownership question on, not the MH.

But in this case, the land nor the MH are owned by the borrower. They are both owned by the guarantor.
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#2167778 - 03/13/18 02:19 PM Re: Land interest choices - Manufactured housing RR Joker
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There is not an option for NA on the ownership question. I have to pick something.

Under the Land Interest choices you should have a Code 5 - Not Applicable unless your software is not giving you that option due to choosing Code 1 or 2 under MH Information.

Your applicant/borrower has no direct or indirect ownership nor do they have a paid or unpaid leasehold agreement in the property. IMHO Code 5 is the choice that fits the situation for the Land Interest. Whether your software allows that is another question.
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#2167782 - 03/13/18 02:29 PM Re: Land interest choices - Manufactured housing RR Joker
rlcarey Online
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I concur.

Indicate the applicant’s or borrower’s land property interest in the land on which a manufactured home is, or will be, located

The applicant or borrower doesn't own anything.
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#2167794 - 03/13/18 03:05 PM Re: Land interest choices - Manufactured housing RR Joker
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According to the Bureau, the following are the only options for reporting NA

To report not applicable, enter “Code 5” for:
 The dwelling related to the property identified is not a manufactured home, § 1003.4(a)(30); Comment 4(a)(30)-6
 The dwelling related to the property identified is a manufactured home community that is a multifamily dwelling, Comment 4(a)(30)-4; Comment 4(a)(30)-6
 A location for the manufactured home related to a covered loan or application has not been identified, § 1003.4(a)(30); Comment 4(a)(9)-5
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#2167796 - 03/13/18 03:08 PM Re: Land interest choices - Manufactured housing RR Joker
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Now then, tell me guys...what part of the following doesn't fit this?

Unpaid Leasehold. For example, an unpaid leasehold occurs when the borrower locates the Manufactured Home on land owned by a family member, does not have a written lease, and does not have an agreement regarding rent payments. Comment 4(a)(30)-2.

this, also, would be 'no ownership' situations, wouldn't you think?
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#2167798 - 03/13/18 03:12 PM Re: Land interest choices - Manufactured housing RR Joker
rlcarey Online
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when the borrower locates the Manufactured Home

The borrower isn't locating anything. He doesn't own the mobile home.
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#2167800 - 03/13/18 03:15 PM Re: Land interest choices - Manufactured housing RR Joker
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That's an example. Basically, the home is located on land he does not own, or there is no written proof of any ownership. Again, there is no written option [at this time] for NA.
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#2167803 - 03/13/18 03:20 PM Re: Land interest choices - Manufactured housing RR Joker
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This is reportable when the borrower or applicant owns the manufactured home to indicate what sort of property on which they are placing the manufactured home. In the case of pledged collateral, it is just purely not applicable as it is not the borrower's home.
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#2167806 - 03/13/18 03:24 PM Re: Land interest choices - Manufactured housing RR Joker
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This could be another screwy scenario that wasn't thought of when the rule was written or when the reporting NA chart was made. If the guarantor owns both the land and the home I don't see where unpaid leasehold comes in to play. The most logical code would be NA but I agree that the NA chart doesn't seem to indicate that that is an option. I still think I would report NA because that is the only one that makes sense.....if I understand the scenario correctly.
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#2167811 - 03/13/18 03:30 PM Re: Land interest choices - Manufactured housing RR Joker
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I have shot an email off to the Bureau.
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#2167813 - 03/13/18 03:31 PM Re: Land interest choices - Manufactured housing RR Joker
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I could see it fitting EITHER Unpaid Leasehold [pretty darn generic of a definition] or NA, but agree...NA isn't an allowable option which only leaves the former.
Last edited by RR Joker; 03/13/18 03:32 PM.
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#2167830 - 03/13/18 04:12 PM Re: Land interest choices - Manufactured housing RR Joker
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out of the frying pan...
I'm curious to see how they'll reply. I agree that logically NA is the best answer, but I don't see how the current instructions allow for it.
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#2167851 - 03/13/18 05:16 PM Re: Land interest choices - Manufactured housing RR Joker
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I am interested in their answer as well. Reading this thread made my head spin.
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#2167853 - 03/13/18 05:20 PM Re: Land interest choices - Manufactured housing RR Joker
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I will report back soon as I hear something, whatever it may be, from them laugh!
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#2167855 - 03/13/18 05:21 PM Re: Land interest choices - Manufactured housing RR Joker
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FWIW, I would also prefer NA.
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#2167860 - 03/13/18 05:35 PM Re: Land interest choices - Manufactured housing RR Joker
rlcarey Online
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Wait a minute - a loan to a business, if not for purchase, refinance or home improvement is not reportable. What is the purpose of this loan?
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#2167862 - 03/13/18 05:42 PM Re: Land interest choices - Manufactured housing RR Joker
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Refinance. Besides, I will run into this on a semi-regular basis, so best to go ahead and figure it out now.

And wouldn't you know...I'm sitting here right now with another one. this one is consumer, but same scenario.
Last edited by RR Joker; 03/13/18 06:15 PM.
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#2168059 - 03/14/18 02:39 PM Re: Land interest choices - Manufactured housing RR Joker
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Received a call, but no answer as of yet. They are stumped as well.
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