We have a loan that that closed as a commercial loan but it smells like consumer. Borrower A rented a 1-4 family for years. Owner offered to sell it at a reduced price. She will live in it as her primary residence. Borrower B is her business partner. He works in real estate flipping houses and renting houses / she does housekeeping at his properties. He will not occupy the collateral at all. The property is in both of their names jointly, term of the loan is 5 years P&I (20 year am), primary source of repayment is regular income.

The loan officer is saying that Borrower B is a silent partner of Borrower A and he'll get his money back when the home is sold. If Borrower A was a sole borrower it would clearly be consumer purpose. If Borrower B was the sole borrower it would be commercial purpose.
She we have documented this as a consumer purpose loan? Thanks in advance.

Consumer mortgage - the rest of that information is just noise. The purpose of the loan is to acquire a primary residence for borrower A.

Thanks Randy

IMHO - Cowboys Fan - one issue with many lenders is they think that the loan and documentation is based on the department that is producing it. In their minds, a commercial loan is exempt from consumer documentation because it's "commercial".

Bull-feathers! They need to think of it as P U R P O S E, not originating department. The customer made an application for credit, the bank decides where they're going to process it, If an examiner wants to find issues, they will intentionally look for consumer purpose loans in the commercial loan department, or for deposits, accounts issued in Private banking. In many cases the incumbents think the rules do not apply to them.

Rocky steps off soap-box.

I could not agree more!