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#2185440 - 07/16/18 02:17 PM Loan purpose-TRID?
mdog76 Offline
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Is the purpose of the loan intended to determined at loan closing or future purpose? By that I mean, customer purchases a vacant lot in order to possibly build a spec home in the future. Customer already has other spec homes in process. Or am I thinking about this too much?

Thank you.

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TRID - TILA/RESPA Integrated Disclosures Rule
#2185442 - 07/16/18 02:19 PM Re: Loan purpose-TRID? mdog76
RR Joker Offline
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It's a purchase. That is your top of the waterfall.
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#2185443 - 07/16/18 02:20 PM Re: Loan purpose-TRID? mdog76
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But curiously, spec homes would typically be commercial purpose, so I'd question your lot purchase being consumer.
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#2185444 - 07/16/18 02:20 PM Re: Loan purpose-TRID? mdog76
raitchjay Online
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I think i'd want a bit more than "POSSIBLY build a spec home in the future", but if you have a customer who builds spec homes for a living and they buy a tract of land to (definitely) build one later (not with your loan), i wouldn't have a hard time exempting the land only purchase loan from Reg. Z as business purpose.

I'm assuming this loan is to an individual....if to a non-natural person (LLC, etc.) then it's exempt anyway.
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#2185445 - 07/16/18 02:21 PM Re: Loan purpose-TRID? mdog76
raitchjay Online
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Joker...i think what the OP is getting at is.....the first loan will ONLY purchase the land...no spec home construction will take place until some future loan.
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#2185446 - 07/16/18 02:24 PM Re: Loan purpose-TRID? mdog76
raitchjay Online
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And i think they're asking whether you can exempt from Reg. Z/TRID.
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#2185452 - 07/16/18 02:27 PM Re: Loan purpose-TRID? mdog76
mdog76 Offline
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That's it, sorry for the confusion. Our loan is to purchase the land only. The loan is to an individual and he builds spec homes for a living.

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#2185453 - 07/16/18 02:29 PM Re: Loan purpose-TRID? mdog76
Dan Persfull Offline
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Is the purpose of the loan intended to determined at loan closing or future purpose?

The use of the proceeds dictates what the loan's purpose is.

By that I mean, customer purchases a vacant lot in order to possibly build a spec home in the future. Customer already has other spec homes in process.

As the others have said this statement as worded is a bit confusing. If the purchase of the lot is for business purposes then it is exempt from Reg. Z.

If this borrower is in the business of building spec homes and the intended purpose is to build a spec home then I would agree with exempting the loan from Reg. Z.
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