Thread Options
#2212505 - 04/30/19 08:31 PM Cross collaterization of primary residence
Banker75 Offline
Member
Joined: Oct 2015
Posts: 93
I assume this has been addressed but I am having difficulty in finding the answer and need some clarification. We have a consumer that has a HELOC on his primary residence. He just purchased some land to construct a new primary residence and would like to use his current home connected with the HELOC to also secure the loan for the land and construction. Can you cross-collaterize a consumer's primary residence and not take a second lien? Per conversation with the lender, the customer does not want a second lien on his house, just verbiage stating the residence is securing two loans.

Any guidance is much appreciated.

Return to Top
Lending Compliance
#2212508 - 04/30/19 08:41 PM Re: Cross collaterization of primary residence Banker75
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,464
Bloomington, IN
Nothing says, that I am aware of that you have to perfect your lien. The only issue would be if the loan went bad then you will have a difficult time foreclosing on the property.

Regardless if you perfect the lien the loan will still be secured by a dwelling and dirt so TRID, Flood, HMDA and all the other fun consumer regulations are going to apply including their disclosure requirements and the right of rescission.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#2212510 - 04/30/19 09:20 PM Re: Cross collaterization of primary residence Banker75
swiggles Offline
Power Poster
swiggles
Joined: Aug 2001
Posts: 7,333
Check your state law.....wouldn't be able to do that in my state. Sounds like you need an attorney regardless.
_________________________
The more you sweat in training, the less you bleed in battle.......

Return to Top
#2212511 - 04/30/19 09:23 PM Re: Cross collaterization of primary residence Banker75
Banker75 Offline
Member
Joined: Oct 2015
Posts: 93
Dan,

Thank you both for responses. We will proceed in seeing if the bank's attorney can guide us with this request.

Thank you again!

Return to Top
#2212586 - 05/01/19 06:08 PM Re: Cross collaterization of primary residence Banker75
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,464
Bloomington, IN
bank's attorney can guide us with this request

If you execute a security agreement secured by the consumer's current primary dwelling make sure the attorney is familiar with 1026.19, .37, .38 and .23 in particular. These sections of Reg. Z are not dependent on the security being perfected with the appropriate recording authority.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top

Moderator:  Andy_Z