We are making an ag loan for a son to buy out his siblings' interest in the family farm. This loan is not subject to RESPA (over 25 acres) or HMDA (ag loan). It wouldn't be subject to Reg Z as business purpose, but there is a factor that bothers me. The father maintains a life estate on the property. Therefore we are requiring him to sign a mortgage securing the dwelling as collateral. The father will not be on the note. The son has no right to rescind because he doesn't reside on the property, but does the father have a right to rescind, because he is pledging his primary residence as collateral, even though he isn't obligated on the note? Or is this just exempt from Reg Z and rescission all together because it is a business purpose loan?
Opinions expressed here are mine, not necessarily my employers. This is not legal advice.