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#2260139 - 09/23/21 03:11 PM TRID - Purpose?
mnbanker09 Offline
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Joined: Jan 2018
Posts: 122
Looking for compliance support!

Borrower owns their primary residence. Borrower is purchasing a new home, and will use their current home as a rental property.
The purchase transaction for the new home is going through our secondary market program. The borrower is looking to do a cash-out refinance on their current home to use as the down-payment on the new purchase.

The lender stated that because the current home will be non-owner occupied and a rental property he can run the refi as a business purpose loan. This appears to be consumer purpose and TRID applies?
Last edited by mnbanker09; 09/23/21 03:17 PM.
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Lending Compliance
#2260140 - 09/23/21 03:17 PM Re: TRID - Purpose? mnbanker09
Tater Offline
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Joined: Jan 2006
Posts: 629
Missouri
Originally Posted by mnbanker09
The lender stated that because the current home will be non-owner occupied (due to secondary market rules) and a rental he can run the refi as a business purpose loan. This appears to be consumer purpose and TRID applies?

You're right in how I would apply it in my shop.
Consumer purpose because the funds will be used for the primary dwelling acquisition, even though the subject property will later switch to investment.

I would even submit that the down payment loan may be (is?) rescindable since it is still the primary residence.
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#2260141 - 09/23/21 03:18 PM Re: TRID - Purpose? Tater
mnbanker09 Offline
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Joined: Jan 2018
Posts: 122
Thank you. I agree on rescission.

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#2260142 - 09/23/21 03:35 PM Re: TRID - Purpose? mnbanker09
Skittles Offline
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Skittles
Joined: Sep 2002
Posts: 13,963
TN
I also agree - consumer purpose with rescission. Also your lenders should know (most don't) that this is purpose driven - not collateral driven. It could be secured by a warehouse and still be consumer purpose.
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#2260143 - 09/23/21 03:53 PM Re: TRID - Purpose? Skittles
mnbanker09 Offline
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Joined: Jan 2018
Posts: 122
Thanks Skittles!

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