I am starting my RESPA audit and am going to include CML loans. What do I need to look for? I am not that familiar with CML and need a direction. These are for business purpose so how do I choose loans. So far is it just the Sec 8 that applies? And what do I look for? Thanks for any assistance.

Generally, commercial loans are exempt from RESPA. RESPA doesn't apply to any commercial property, and it doesn't apply to business purpose loans.

I think the only audit step I'd include in the program is to look for loans that might be covered by RESPA. If you found any, then you could use your consumer RESPA program, or the RESPA checklist in your regulator's exam procedures.

Thank you for your answer. That is kind of what I thought but I kept an article that was in the ABA Bankers news regarding CML lending Pitfalls and RESPA was on that list and it started to worry me. Section 8 and HUD1 was mentioned in particular.

Perhaps they meant loans that were booked by commercial loan officers but were for a consumer's residential property? I agree with lglover, just keep an eye out for loans that should properly be classified as consumer, and maybe remind your commercial lenders of RESPA as needed.

The risk, IMO, is that your commercial lenders will make a RESPA covered loan and not know it. It's a good idea to consider RESPA in your commercial loan audit program for just that reason. I think you're on the right track!

Look at the outline I wrote for a short presentation to private banking loan officers. It is posted at http://www.bankersonline.com/compliance/hl_alligators.html .