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#2237587 - 06/04/20 08:00 PM Refinance and ROR
Patricia Offline
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Joined: Mar 2011
Posts: 327
Kansas
Applicant has been buying primary resident on contract and now wants to payoff the contract and obtain a loan with the bank. For TRID purposes would this be a refinance?

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#2237588 - 06/04/20 08:17 PM Re: Refinance and ROR Patricia
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 77,216
Galveston, TX
Technically, it most likely would be Home Equity.

1026.37(a)(9)(ii) Refinance. If the credit is not for the purpose described in paragraph (a)(9)(i) of this section, and if the credit will be used to refinance an existing obligation, as defined in § 1026.20(a) (but without regard to whether the creditor is the original creditor or a holder or servicer of the original obligation), that is secured by the property identified in paragraph (a)(6) of this section, the creditor shall disclose that the loan is for a “Refinance.”

1026.20(a) Refinancings. A refinancing occurs when an existing obligation that was subject to this subpart is satisfied and replaced by a new obligation undertaken by the same consumer.

Most land sales contract are not subject to Subpart C of Regulation Z.
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#2237589 - 06/04/20 08:19 PM Re: Refinance and ROR Patricia
Patricia Offline
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Joined: Mar 2011
Posts: 327
Kansas
Thank you.

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#2237601 - 06/04/20 09:04 PM Re: Refinance and ROR Patricia
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,416
Bloomington, IN
Since ROR is in the title you will want to look at the following in 1026.2.

5. Acquisition. i. A residential mortgage transaction finances the acquisition of a consumer's principal dwelling. The term does not include a transaction involving a consumer's principal dwelling if the consumer had previously purchased and acquired some interest to the dwelling, even though the consumer had not acquired full legal title.

ii. Examples of new transactions involving a previously acquired dwelling include the financing of a balloon payment due under a land sale contract and an extension of credit made to a joint owner of property to buy out the other joint owner's interest. In these instances, disclosures are not required under §1026.18(q) (assumability policies). However, the rescission rules of §§1026.15 and 1026.23 do apply to these new transactions.
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