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#2240597 - 08/04/20 02:38 PM Car Condo Loan
mnbanker09 Offline
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Joined: Jan 2018
Posts: 122
Looking for guidance on disclosures, please.

Consumer requests financing to purchase a car condo. Loan secured by a 2nd lien on an apartment building owned by his commercial entity. Purpose is consumer, so assuming TRID applies.

This car condo loan request is a first for us, but given this customer has a number of consumer and commercial loans with us the lender wants to finance this as well.

Where do we go from here regarding product type and disclosures? Follow consumer RE? But isn't it commercial property?
Thanks in advance for your guidance. Lending compliance is not my wheelhouse.

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Lending Compliance
#2240599 - 08/04/20 02:44 PM Re: Car Condo Loan mnbanker09
rlcarey Offline
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rlcarey
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Posts: 80,325
Galveston, TX
I have no idea what a car condo might be, but it sounds like TRID to me as it appears to be consumer purpose. Any other disclosures related to 1-4 family secured loans would not apply.
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#2240639 - 08/04/20 08:40 PM Re: Car Condo Loan mnbanker09
John Burnett Offline
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John Burnett
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Cape Cod
It's essentially a condominium auto garage, where ownership of the garage space is separate from ownership of a condo dwelling. From a Reg Z perspective, it's secured by "dirt" to the same extent a condo dwelling is, and given the consumer purpose, it's a TRID loan.
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#2240640 - 08/04/20 08:48 PM Re: Car Condo Loan mnbanker09
rlcarey Offline
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rlcarey
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Galveston, TX
In this case though the loan is to be secured by a 2nd lien on an apartment building owned by his commercial entity and not the parking space.

I know that parking spaces in condo units may be sold separately, but I could not get the picture of a small cubby hole up on the 27th floor with a car parked in it smile
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#2240656 - 08/05/20 02:22 PM Re: Car Condo Loan mnbanker09
John Burnett Offline
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John Burnett
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Cape Cod
LOL! Getting back to the OP, if the loan is for a consumer purpose, and secured by real estate of whatever type (not the real estate to be acquired, in this case), it will be covered by the TRID rules and any other applicable Reg Z requirement (not owner occupied, not a dwelling).

As for the TRID purpose, it won't be a purchase, refi, or construction, so it defaults to Home Equity Loan even though the security won't be his home. The product type will be lender choice considering the customer relationship, security type, etc.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
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#2240695 - 08/05/20 06:03 PM Re: Car Condo Loan mnbanker09
DeeQ Offline
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DeeQ
Joined: Dec 2002
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Turnpike Exit 10
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#2240704 - 08/05/20 07:02 PM Re: Car Condo Loan mnbanker09
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 80,325
Galveston, TX
LOL - next thing you know someone will be building barndominiums.

P.S. I do know they already exist.
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