Would you agree that this is consumer purpose and subject to RESPAand Z?

Stated Purpose of loan is to pay off credit cards (49% of loan proceeds) and make repairs to rental house (51% of loan proceeds). Loan is to an individual and it will be secured by the rental house.

I vote business. The majority of the money is for an exempt purpose (rental property).

With the mix being so close 49/51, I vote consumer. When in doubt, disclose

Which property is securing the loan? If the rental property is the security instead of the borrower's primary residence, wouldn't that release the burden of at least rescission (if not any other Reg Z items) and make at least the Mortgage Servicing Policy disclosure portion of RESPA something that would not be needed?

(I could easily be wrong and would appreciate any thoughts that run counter to mine.)

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Which property is securing the loan?

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Loan is to an individual and it will be secured by the rental house.

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Russell, have you had your caffiene this morning?

Thanks for your thoughts.

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If the rental property is the security instead of the borrower's primary residence, wouldn't that release the burden of at least rescission (if not any other Reg Z items)

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Russell, sorry I must not have had my caffiene this morning either .

IMO, in the scenario presented, the loan is exempt from Reg. Z.

However, if the loan mix was reversed, and even though it would be secured by the rental property, it would be a consumer purpose loan and subject to Reg. Z (except for ROR).

Actually Dan, I think I had too much caffeine this (and every other) morning. Hard to read when the screen is bounding around. Either that or I had that selective reading failure or something along that line.

I agree that the purpose clouds the issue though, but I wouldn't be scared if the lender exempted it from RESPA. Besides, many lenders claim that the borrowers' CC debt is due to business purposes, anyway

Oh, well.

I posed this question to the OCC a couple of years ago and they told me their rule was if more than 50% of the proceeds were for consumer purpose it was considered consumer and reg Z applied. According to section 226.3(a) an extension of credit primarily for a business, commercial, or agricultural purpose is exempt. I think 51% business/49% consumer is primarily business and reg Z does not apply.

This is just an opinion and only mine!