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.

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.

Check your state law.....wouldn't be able to do that in my state. Sounds like you need an attorney regardless.

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!

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.