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#1574057 - 07/05/11 10:33 PM RV loans as personal residence
Insanity Queen Offline
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Joined: Oct 2008
Posts: 114
One of our consumer lenders sent me an email that a customer came in to apply for an RV loan. The customer said they had been somewhere else and they were told that the "President signed something into a new law prohibiting financial institutions to make loans on RVs if the RV is going to be used as the principal residence.". The 'somewhere else' was another financial insitution, but I've never heard that prohibition before. Was I asleep when that happened or is the 'somewhere else'dreaming?

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#1574061 - 07/05/11 11:26 PM Re: RV loans as personal residence Insanity Queen
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
The other bank may have been referencing the need to comply with the SAFE Act for loans to finance RVs to be used as principal residences. That bank perhaps chose not to register the consumer lenders who handle RV loans and therefore will not lend for RVs to be used as principal residences.
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#1574225 - 07/06/11 02:59 PM Re: RV loans as personal residence Kathleen O. Blanchard
Insanity Queen Offline
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Joined: Oct 2008
Posts: 114
Thanks. I didn't think about that.

The other aspect I researched is the issue of Reg Z's 226.35(b)(3)requirement for esscrows. This section includes structures that are classified as personal property under state law as principal dwellings that would require escrow accounts to be established. Therefore, an escrow account would have to be established on a higher priced mortgage loan secured by a first lien on a mobile home, boat or trailer (RV) used as the consumer's principal dwelling.

So it's not prohibited under Reg Z, but it does require the establishment of the escrow if it's higher priced (and usually is for an RV loan). The other institution probably didn't want to mess with the escrow part because it's hard to determine the taxes for a year on something that isn't real estate... In an article I read, it stated several of the larger banks are refusing to make these types of loans because of the escrowing requirement - an unintended consequence of the way Reg Z was written.

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#1574278 - 07/06/11 03:46 PM Re: RV loans as personal residence Insanity Queen
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
I am sure these issues are what the other bank was (mis)communicating...they will not make the loans due to new requirements...not that the loans are not allowed.
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#2233730 - 03/26/20 07:38 PM Re: RV loans as personal residence Insanity Queen
Irishguy Offline
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Irishguy
Joined: Aug 2008
Posts: 613
Kentucky
Bringing this back up.....so an RV loan would count towards a mortgage loan in regards to the SAFE Act? What if the RV was used "commercial" just to stay on job sites?
Last edited by Irishguy; 03/26/20 07:57 PM.
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#2233742 - 03/26/20 08:42 PM Re: RV loans as personal residence Insanity Queen
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Then it is not for a consumer purpose.
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