OK - - - follow along if you dare - - -
One of our commercial customers owns some lakefront property in another state. His idea was to build vacation cabins that are permanently affixed to foundations. He is constructing these cabins and selling them to local consumers.
The cabins are being purchased but the "dirt" is not. The buyers are signing a 10-yr, non-auto-renewal lease on the land. The cabins are theirs.
Our commercial customer is guaranteeing each mortgage loan. His guaranty is secured by a mortgage that our commercial department holds on the land - - all of it.
We are doing the purchase money mortgages on these cabins. (Don't ask.) I am comfortable with the promissory notes and security documents we have prepared, but......I'm not the CO.
Here's my thinking on the regulatory compliance end.... we do a flood, we provide a copy of the appraisal, Reg Z applies but RESPA doesn't.
Something feels wrong about not doing a HUD at closing, but.....
(Sorry this got so long.....)