I'm sure this question has been asked and answered, but I can't seem to locate it. We have a Reg O portfolio loan to an executive officer secured by 1st lien on a dwelling. The executive also wants to obtain a conventional loan for a second dwelling. The loan will be sold to Fannie/Freddie, but our bank would own it for the period between closing and sale - typically about 7 days. Is there any exception to Reg O for this type of conventional loan transaction? I can't find it, but hoping one exists.

There is no exemption if the loan is closing in the name of the bank. You can't put a demand clause on a secondary market loan and the loan could not be bought by the investor or put back to you at any time.

Thanks, Randy. That is what I was thinking as well but wanted to confirm.