We have a loan that is 100% secured by CD, but the customer's mother insisted we take a mortgage....the proceeds are going to be used to purchase a primary residence. Since this is 100% secured by CD, we can eliminate all of the earlies, etc., can we not? (I just love creative lending....)

thanks

Earlies? Do you mean the preliminary disclosures?

the loan officer is arguing that the real estate is taken as abundance of caution, since the loan is fully secured by CD. And in answer to the prior post, yes I mean the preliminary disclosures when I say "earlies" - sorry that's the in-house lingo.

So I'm guessing that the disclosures are all going to apply regardless, yes??

Abundance of caution does not mean squat when it comes to consumer disclosures and requirements. The loan is secured by a mortgage, period.

The loan is subject to applicable Reg. Z, RESPA, HMDA, Flood, etc. disclosures and requirements.

Underscoring Dan's good advice, don't overlook the fact that you will need to force the borrower to purchase flood insurance if the property is in a flood zone. (Lenders always groan about this problem in an AOC situation.)