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#2239490 - 07/13/20 07:46 PM Land loan refinanced now has a dwelling
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Diamond Poster
Joined: Nov 2008
Posts: 1,061
In the mountains
We have a land loan on the books that has been been refinanced. Since the land loan was originally originated, the customer has been building a home that was at the time of the refinance about 75% complete. The customer did not obtain any loans with us to finance the construction of the home. The home will be the customer's primary residence when complete. In the meantime, he is living in his dad's small manufactured home that is on the same property. This small manufactured home is personal property for the dad even though it sits on our customer's land, we do not have title to it and it is my understanding that it has not been mobilized.

To qualify to be a residential mortgage transaction is must be the the acquisition or initial construction of that dwelling. That is not the case for this refinance or even the original loan. Since there is now a home that is 75% complete intended to be the the primary residence of the customer, was rescission required?
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#2239499 - 07/13/20 08:28 PM Re: Land loan refinanced now has a dwelling Likes to Comply
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,912
Galveston, TX
Refinancing - as in you gave them more money or it was a straight refinance? Were you the original creditor on the first loan?
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#2239503 - 07/13/20 08:55 PM Re: Land loan refinanced now has a dwelling Likes to Comply
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In the mountains
We were the original creditor. No new monies. It was a land balloon loan previously and was maturing. Just refinancing for the final 5 years.
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#2239505 - 07/13/20 09:01 PM Re: Land loan refinanced now has a dwelling Likes to Comply
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,912
Galveston, TX
Current loan secured by primary residence refinanced by the original creditor with no new money does not trigger rescission.
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#2239520 - 07/14/20 12:12 PM Re: Land loan refinanced now has a dwelling Likes to Comply
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Diamond Poster
Joined: Nov 2008
Posts: 1,061
In the mountains
lol...didn't even think about the no new money. Thanks!
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