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#845127 - 10/30/07 02:11 PM predocs required?
parr04 Offline
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Joined: Aug 2004
Posts: 394
oklahoma
Our bank financed the construction of a new primary residence for a borrower. Construction is complete, borrower has moved in and mortgage company has taken us out.

We are taking a second back on the new construction along with a first mortgage on the old residence for a period of one year to allow the borrower to sell the old home and pay our second mortgage off. In this case what regs apply(RoR, HMDA, RESPA)?

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#845178 - 10/30/07 02:36 PM Re: predocs required? parr04
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
This is a consumer loan subject to all the applicable consumer regulation.

Flood applies,
ROR applies since you are taking a security interest in their current primary residence unless the second is part of the residential mortgage transaction,
ETIL would apply if the second being taken is part of the Residential Mortgage Transaction,
HMDA and RESPA may or may not apply. If you have set it up to amortize then I would say yes. If you have set it up as a single payment until the old house sells then I would say you have a bridge loan and it would be exempt,
Reg. B will apply.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#845196 - 10/30/07 02:48 PM Re: predocs required? Dan Persfull
parr04 Offline
Gold Star
Joined: Aug 2004
Posts: 394
oklahoma
Thanks Dan,

This is a one year single pay loan with interest due monthly. I thought this would be considered a bridge loan and would be exempt as temporary financing.

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