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#2184749 - 07/10/18 12:12 PM TRID-Purpose With Quit Claim
Libelle Offline
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Registered: 03/26/14
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I have a situation where a living trust will be the borrower and the grantor of the trust will be personally guaranteeing the loan. These are the same person. This will be the primary residence for the grantor/guarantor. An LLC currently owns the property that is being quitclaimed to the living trust (which is owned solely by the grantor of the trust). The quitclaim will be signed at closing. The existing loan, in the name of the LLC, will be paid off from the proceeds of the new loan. I am not sure if I am reading too much into it, but for the TRID purpose it seems like a purchase and at the same time seems like it could be a refinance. Any help would be appreciated. Thanks.

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#2184764 - 07/10/18 12:58 PM Re: TRID-Purpose With Quit Claim [Re: Libelle]
RR Joker Offline
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Appears to be a purchase to me...I don't see a refinance as you don't have a common consumer.
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#2184781 - 07/10/18 01:27 PM Re: TRID-Purpose With Quit Claim [Re: Libelle]
raitchjay Offline
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Agree. ^^
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#2184795 - 07/10/18 03:37 PM Re: TRID-Purpose With Quit Claim [Re: Libelle]
Libelle Offline
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I apologize for asking for more clarification, but I want to make sure that we are doing the correct thing. We actually have two separate requests that are similar to this right now.

So, you both feel that the sole member of the LLC being the same person as the grantor of the living trust is not an indicator of being a common consumer? And that it would seem to be a purchase from an entity for the TRID purpose?

Would you feel the same way if the quitclaim was already completed before the request for the new loan? Or would you feel that it would be a refinance at that point since they would technically be the owner?

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#2184798 - 07/10/18 03:49 PM Re: TRID-Purpose With Quit Claim [Re: Libelle]
RR Joker Offline
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So, you both feel that the sole member of the LLC being the same person as the grantor of the living trust is not an indicator of being a common consumer? And that it would seem to be a purchase from an entity for the TRID purpose? No

If the QC is already done then the [new] borrower already holds an ownership interest and therefore, would not be purchasing. However, you still don't have a refi because it's different borrowers. My opinion is that you have an HE.

(a) Refinancings. A refinancing occurs when an existing obligation that was subject to this subpart is satisfied and replaced by a new obligation undertaken by the same consumer. A refinancing is a new transaction requiring new disclosures to the consumer. The new finance charge shall include any unearned portion of the old finance charge that is not credited to the existing obligation.

In our original post you state: An LLC currently owns the property . Who is currently the borrower? Perhaps I'm missing something important. wink
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#2184811 - 07/10/18 04:21 PM Re: TRID-Purpose With Quit Claim [Re: RR Joker]
Libelle Offline
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Registered: 03/26/14
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The LLC is solely owned by the same person who is the grantor of the living trust. The borrower will be the trust, with it also being personally guaranteed by the person who is the grantor of the trust (who is also the trustee). Holy cow, the situation makes me feel like my head is spinning. I do appreciate your input on this! Sometimes it is very helpful to bounce things off of other people when you feel like you have dug yourself into a little hole of "What the heck?!?". And to think, this all started with loan ops asking if they have the right TRID purpose for the Loan Estimate!


Edited by Libelle (07/10/18 04:31 PM)

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#2184813 - 07/10/18 04:38 PM Re: TRID-Purpose With Quit Claim [Re: Libelle]
RR Joker Offline
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Registered: 11/15/02
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That wasn't my question. Who is the borrower on the current loan being paid off?
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#2184815 - 07/10/18 04:39 PM Re: TRID-Purpose With Quit Claim [Re: Libelle]
RR Joker Offline
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[who owns the LLC is moot. Guarantors are moot]

In a nutshell, if the LLC is the borrower on the current loan, you do not have a refinance. wink
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#2184840 - 07/11/18 12:07 AM Re: TRID-Purpose With Quit Claim [Re: Libelle]
Truffle Royale Offline


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refi is same borrower. LLC is borrower on original mortgage. Trust is borrower on new mortgage, therefore, not a refinance.

That leaves purchase or home equity.
Honestly, I'm leaning towards home equity based on the fact that the same person is involved all the way through this, first as sole owner of the LLC and as the trustee of the trust. The trustee is using equity of the property the trust now owns to pay off a bill which happens to be a mortgage.

All that said, I can see the purchase side too.

I honestly think you need to pick one and document your reasoning and let it go.

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#2185356 - 07/13/18 02:20 PM Re: TRID-Purpose With Quit Claim [Re: Libelle]
John Burnett Offline

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I read the situation as the trust is acquiring the property from the LLC as part of the transaction -- purchase.
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#2186823 - 07/25/18 03:53 PM Re: TRID-Purpose With Quit Claim [Re: Libelle]
Libelle Offline
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Registered: 03/26/14
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Thank you for your responses. The LLC ended up already quitclaiming the property to the Living Trust. Now we are working through it. However, I would like to inquire about whether this should be HMDA reportable or not. If so, what would you list as the purpose?

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#2186827 - 07/25/18 04:03 PM Re: TRID-Purpose With Quit Claim [Re: Libelle]
rlcarey Online
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So, you are saying the LLC transferred the property prior to paying off their loan most likely in violation of the current loan agreement?
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#2186831 - 07/25/18 04:10 PM Re: TRID-Purpose With Quit Claim [Re: Libelle]
Libelle Offline
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Registered: 03/26/14
Posts: 5
That is correct.

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