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#2202873 - 01/14/19 05:00 PM TRID Purpose- Act of Donation & Buy Modular Home
Shondra Offline
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I have a loan where the purpose is to purchase a modular home to be moved onto a piece of land that the borrower is acquiring via act of donation from her parents at closing. I am labeling this as a home equity loan for TRID, since the proceeds of the loan are not being used to acquire the land, but I would like a little reassurance that my line of thinking is correct since the transfer is taking place at the loan closing.

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#2202899 - 01/14/19 06:47 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
rlcarey Offline
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It is not purchase: If the credit is to finance the acquisition of the property
It is not refinance and it does not involve the initial construction of a dwelling.
You are left with Home Equity.
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#2202900 - 01/14/19 07:15 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
RR Joker Offline
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Line one needs a 'not' in it. wink
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#2202908 - 01/14/19 07:35 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
rlcarey Offline
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It is from the definition from the Reg - after the ":" - but yes - probably confusing as presented - need more coffee - I am currently in a very early time zone. smile
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#2202915 - 01/14/19 08:11 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
RR Joker Offline
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It is not purchase: If the credit is not to finance the acquisition of the property

You mean the definition is missing the above 'not'? crazy
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#2202916 - 01/14/19 08:11 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
RR Joker Offline
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Or maybe the first 'not' needs to be removed? laugh?
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#2202920 - 01/14/19 08:22 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
raitchjay Online
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OK
I think the way Randy intended it to read is something like this:

It is not purchase (since it does not meet the following criteria as stated in the regulation). "if the credit is to finance the acquisition of the property."

I think the quotes were just meant to be *understood*.
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#2202927 - 01/14/19 08:33 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
rlcarey Offline
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Thanks raitchjay - yes that is what I meant. Mahalo smile
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#2202930 - 01/14/19 08:36 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
raitchjay Online
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OK
Mahalo.......now i'm jealous. smile Have fun down there.
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#2202976 - 01/15/19 01:53 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
RR Joker Offline
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shocked No fair! Personally, I doubt I'd even be on here answering anything! smile
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#2203029 - 01/15/19 05:25 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
Shondra Offline
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Thanks, that was what I was going with but I wanted a 2nd opinion! smile I have been getting some odd scenarios lately that have made me second-guess myself!

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#2204376 - 01/30/19 12:47 AM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
theloanbug Offline
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If customer is using personal residence to purchase land only would this be a home equity for TRID?

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#2204385 - 01/30/19 11:42 AM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
rlcarey Offline
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Galveston, TX
If only the existing residence is taken as collateral - yes.
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#2204548 - 01/31/19 01:56 AM Re: TRID Purpose- Act of Donation & Buy Modular Home rlcarey
theloanbug Offline
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yes it is.

Thanks,

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#2206707 - 02/21/19 05:46 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
BA13 Offline
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If I may, I'd like to tag on to this for a situation we have.
The borrower owns the land free & clear. The borrower is working directly with ABC Co to build a modular home. When the home is completed the company will set the home on the land the borrower owns. Our loan proceeds will then pay ABC Co for the home and our collateral will be the home w/land. For TRID purposes, is this a TRID home equity since there was no dirt being purchased with the loan proceeds?

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#2206710 - 02/21/19 06:04 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
RR Joker Offline
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That's how I've done them, yes.
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#2206713 - 02/21/19 06:42 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
BA13 Offline
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Ok, thanks RR Joker. The investor is instructing the lender to disclose it as a purchase which is creating additional issues on the disclosures.

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#2206714 - 02/21/19 06:49 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
rlcarey Offline
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Galveston, TX
Remind the investor that TRID is all about the DIRT.
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#2206718 - 02/21/19 07:37 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
RR Joker Offline
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RR Joker
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The Swamp
Seriously crazy
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#2206755 - 02/21/19 10:48 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
BA13 Offline
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Posts: 181
Thank you both! We have once again relayed it to be a TRID home equity loan and have highly suggested the lender visit with the investor.

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#2206779 - 02/22/19 01:50 PM Re: TRID Purpose- Act of Donation & Buy Modular Home Shondra
Adam Witmer Offline
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To add to what Randy and Joker already said, you might direct your investor to the CFPB's March 2016 construction webinar where they discuss how the waterfall applies from a construction loan perspective:

A creditor must disclose the purpose as refinance if the consumer intends to use the credit to construct a dwelling on real property that the consumer already owns and to satisfy an existing loan secured by that real property.

If the credit will be used to finance the initial construction of a dwelling on the property and will not be used for any purchase or refinance purpose, the creditor must disclose the purpose as construction.

While your situation is a bit different (not construction), the March 2016 webinar made it clear that previously owned dirt would exclude "purchase" as an option.
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