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#901773 - 02/07/08 09:19 PM Rate Spread
moola40 Offline
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Joined: Nov 2003
Posts: 98
How critical is it if there is a rate spread on the LAR for business loans.

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#901806 - 02/07/08 09:47 PM Re: Rate Spread moola40
Dan Persfull Offline
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Bloomington, IN
It's a reporting error. If there's only one, not critical. If there are several, critical.
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#902101 - 02/08/08 04:24 PM Re: Rate Spread Dan Persfull
complyorelse Offline
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Posts: 441
U.S.
What if there is rental property involved....that is owned by a business?

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#902105 - 02/08/08 04:28 PM Re: Rate Spread complyorelse
ktac MITCH Offline
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Giant side of TX
Rate Spread is for "consumers" & all business purpose loans should be N/A.
Last edited by ktac MITCH; 02/08/08 04:28 PM.
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#902109 - 02/08/08 04:35 PM Re: Rate Spread ktac MITCH
Mrs. Rizzo Offline
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Curled up by the fire...
Rate spread is for loans that are originated and subject to Reg Z. Business purpose loans are not subject to Reg Z.
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#904472 - 02/13/08 10:10 PM Re: Rate Spread Mrs. Rizzo
shinspeter Offline
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Joined: Aug 2007
Posts: 14
Originally Posted By: Wizzin Rizz
Rate spread is for loans that are originated and subject to Reg Z. Business purpose loans are not subject to Reg Z.


How would you define business purpose? In a very common situation at our institution...an individual obtains a loan for an investment property to fix up and resell. Would you consider this a business purpose? or personal since it is a personal investment?

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#904625 - 02/14/08 02:04 PM Re: Rate Spread shinspeter
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
You have the facts of your borrower and only you can make the determination whether it's a business or consumer purpose by reviewing 226.3 and its Commentary to see how your borrower's transaction fits the criteria. For one borrower it could be a personal investment therefore subject to Reg. Z, for another borrower it could be a business purpose loan and not subject to Reg. Z.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#911852 - 02/27/08 10:39 PM Re: Rate Spread Dan Persfull
KTMiteComply Offline
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Joined: Jul 2007
Posts: 3,298
only if I want to....
Good goly moses, sorry for asking such a stupid question, but this week I think I've gone total brain dead!!! So Dan are you saying that if it is a "personal Real Estate" Investment and not coded in our bank as a "Business" loan investment that it would be subject to Reg Z, therefore making it subject to a Rate Spread?
Thanks a heap for all your advice
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#911991 - 02/28/08 01:40 PM Re: Rate Spread KTMiteComply
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,637
Bloomington, IN
A personal investment is not a business purpose loan, therefore it is subject to Reg. Z.

Personal real estate investments ARE NOT exempt from Reg. Z., however the acquisition, maintenance and rehabilitation of non-owner occupied RENTAL PROPERTY is exempt.


If the loan is subject to Reg Z then the HMDA rate spread is applicable.
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The opinions expressed are mine and they are not to be taken as legal advice.

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