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#2216557 - 06/26/19 07:18 PM Dwelling secured or non-dwelling secured....?
Luvs2Comply Offline
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Scenario - Applicant requests to use the equity in their land to build their primary residence which will be located on the property you're collateralizing. You complete a cash out Home Equity because there's plenty of equity and the borrower doesn't want the hassle of a construction loan.

Do you consider this a dwelling secured loan even though there isn't a home on the property at closing? Or would it be non-dwelling secured?

Thank you in advance!

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TRID - TILA/RESPA Integrated Disclosures Rule
#2216585 - 06/27/19 12:08 AM Re: Dwelling secured or non-dwelling secured....? Luvs2Comply
rlcarey Online
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In what context? This is posted in the TRID forum so any consumer purpose loan secured by real property is subject to TRID.
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#2216592 - 06/27/19 11:19 AM Re: Dwelling secured or non-dwelling secured....? rlcarey
theloanbug Offline
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Customer owns land and has almost completed a house on it, but need additional funds to complete some of the inside. Will this be considered a home equity for TRID purpose? This will be his personal residence.

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#2216602 - 06/27/19 01:31 PM Re: Dwelling secured or non-dwelling secured....? Luvs2Comply
John Burnett Offline
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If the customer owns the land outright (no existing mortgages loans secured by it), and you're taking a mortgage interest on the land to secure a closed-end consumer loan, it will be a TRID-covered loan and the TRID loan purpose will be Home Equity Loan.
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#2216624 - 06/27/19 04:17 PM Re: Dwelling secured or non-dwelling secured....? Luvs2Comply
iheartcompliance Offline
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In this case, would you consider it dwelling secured or not dwelling secured for the requirements of sending disclosures such as the Appraisal Notice and Housing Counselor List?

The house isn't out there YET, but you know that it will be built with the proceeds from your loan.

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#2216628 - 06/27/19 04:25 PM Re: Dwelling secured or non-dwelling secured....? Luvs2Comply
rlcarey Online
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OK - we now have three different people asking three separate questions. How are these related? When you say "In this case" - what case are you talking about?

I don't even know why a question regarding dwelling secured is in the TRID forum, as having a dwelling or not has nothing to do with TRID disclosures as long as the loan is secured by real property.
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#2216633 - 06/27/19 04:46 PM Re: Dwelling secured or non-dwelling secured....? Luvs2Comply
Luvs2Comply Offline
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I'm so sorry if you feel as though I have inconvenienced, confused or upset you in where I posted a question. I posted it asking for help.

In the case where the borrower is requesting to use the equity in their bare land to build their primary residence on the property you will be collateralizing - would you consider this a dwelling secured loan knowing that a dwelling would be built on the property? Or would you consider it non-dwelling secured since there isn't a dwelling located on the property at the time of closing.
I want to make sure I am providing the proper disclosures to our borrower.

Where would you suggest this topic be posted?
Homeowner's Counseling list would be RESPA.
The appraisal disclosure would be ECOA.
The loan purpose being TRID.
Last edited by Luvs2Comply; 06/27/19 05:11 PM.
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#2216642 - 06/27/19 05:27 PM Re: Dwelling secured or non-dwelling secured....? Luvs2Comply
rlcarey Online
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Are you are talking about a run of the mill construction loan? Every house is built on bare land. And what do you mean the equity in the bare land? Once you take the land as collateral, you have any buildings that will be constructed. Are you just giving them the money and let them do with it what they want? You don't care if they really use it for construction? If that is the case, then it is a bare land loan and exempt from RESPA.

Also, my comments were not directed at you as the original poster - but the other two posters seemed to be asking their own questions on top of yours.
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#2216647 - 06/27/19 06:24 PM Re: Dwelling secured or non-dwelling secured....? Luvs2Comply
RR Joker Offline
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Quote:
In the case where the borrower is requesting to use the equity in their bare land to build their primary residence on the property you will be collateralizing - would you consider this a dwelling secured loan knowing that a dwelling would be built on the property? Or would you consider it non-dwelling secured since there isn't a dwelling located on the property at the time of closing.
I want to make sure I am providing the proper disclosures to our borrower.

Where would you suggest this topic be posted?
Homeowner's Counseling list would be RESPA.
The appraisal disclosure would be ECOA.
The loan purpose being TRID.


I'm going to assume you are lending money on the equity on bare land. IF so, then I would consider it non-dwelling secured [because those are the facts at the time of the loan]
No HOC
No Appraisal disclosure as you won't be developing or even anticipating developing one on a 1-4 family dwelling.
The loan purpose will be either 1) HE or 2) refi, if anything is owed on the land

And the other forum option for a catchall loan would be the Lending forum wink
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#2216680 - 06/27/19 09:28 PM Re: Dwelling secured or non-dwelling secured....? Luvs2Comply
Luvs2Comply Offline
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Thank you!

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