I have been asked by a Commercial Lender on why the Business Enterprise Affidavit is required? and why it is required to be notarized. This is a stock form that comes out of our loan origination system. My assumption is based on parameters selected during the application data entering, it becomes a required closing document.
The jist of the document states:
The affidavit has language that states the borrowers certify the proceeds for the extension of credit are to be utilized in the conduct of a business enterprise engaged in the business of "type in business enterprise". The undersigned exercise control over the managerial decisions of the business enterprise.
The borrowers sign and then it is notarized.
In this case, we have 2 people as borrowers h/w, who own a 5 unit investment property outright, taking a 1st lien loan as cash out.
Why is this required? is the notarization required? TILA and Reg Z, right?
Thank you!