We regularly do loans to purchase vacant land with additional collateral that contains a dwelling- typically parents are putting up their house as collateral so their adult child can purchase land to build.
When our borrower, the adult child, is our borrower and still lives at home with his parents (so primary residence) is the loan subject to HOEPA?
I don't see any ownership requirement in Reg. Z, section 32, just that it is secured by the consumer's primary residence. Am I missing something?

If your borrowers don't include the owners of the home, then no, HOEPA doesn't apply. For a home to be someone's "primary residence", they must have ownership of it.

I've been looking in the regs for an ownership requirement for primary residence but am unable to locate, do you have one?
Even renters have a primary residence so I am really struggling with the ownership component.
Thoughts?

typically parents are putting up their house as collateral so their adult child can purchase land to build.

Not HMDA - but banks actually make these sorts of loans? The kids cannot even afford to buy the lot and the bank is going to allow the parents to risk their homestead on the transaction? No wonder the CFPB goes on the warpath.

Randy, how is a consumer purpose loan secured by a dwelling not HMDA? My question is does the borrower have to own the dwelling to consider it subject to HOEPA

You're not going to see anything in the regulation definitions that says someone must own it per se......but for it to be YOUR primary residence, you must own it. How can anything be YOURS if you don't own it?

You seem to be focusing on the word "primary"....i think it would help if you focus on "THEIR" (as in "their primary residence").

A renter can't truthfully say that the rent home they live in is "MY primary residence", because they do not own it. They can truthfully say that they live in the house fulltime, but not that it's their primary residence.

ETA: i think what Randy was trying to say by his "not HMDA" comment was that his comment isn't in regards to HMDA (assuming, as i did, that your question had HMDA implications in it). And now that i look back at the title of your post....i think that's definitely what he was saying.

I did not mean that HMDA did not apply, just that my comment was not HDMA related. Of course, it is HMDA reportable. It is not subject to HOEPA however.

1026.32(a) Coverage. (1) The requirements of this section apply to a high-cost mortgage, which is any consumer credit transaction that is secured by the consumer's principal dwelling,

The parents are not consumers if all they are doing is pledging their house..

1026.2(a)(11) Consumer means a cardholder or natural person to whom consumer credit is offered or extended.

Thank you for the expanded explanation---I am HMDEAD this week!