What do you mean that Reg. Z does not apply to investment properties? The ATR/QM rules apply to ANY consumer purpose loan secured by a dwelling, so long as it isn't otherwise exempt (temp. financing, etc.). "Investment properties" is pretty much a meaningless term when it comes to Reg. Z. An "investment property" can be one that someone who has no other dealings in a real estate related business owns as a consumer investment (for example, a loan to buy out a relative on a family-inherited home). Or an "investment property" can be a loan to purchase a non-owner occupied rent home, which is indeed exempt from the entirety of Reg. Z (including ATR/QM).
Last edited by raitchjay; 04/28/22 06:41 PM.
Additionally, purpose not collateral drives Reg. Z coverage.....i can pledge my non-owner occupied rent home as collateral for a loan to fund my vacation to Hawaii.....totally covered by Reg. Z and ATR/QM rules. On the flip side, i can pledge my primary residence for a loan to purchase cattle for my ranch.....totally exempt from Reg. Z and ATR/QM rules
"Investment properties" as a phrase has its place i suppose, but it gets dangerous when used as some sort of blanket statement covering any home that isn't a primary residence. The only sort of blanket exemption in Reg. Z when it comes to occupancy of homes is the exemption for loans to acquire, improve, or maintain "non-owner occupied" rent homes. That's it. When people start lumping other things into that in some vague idea of "investment properties" and what is and isn't exempt...problems can follow.
I'm fixin' to fix that.