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#1784493 - 02/09/13 02:00 AM Const. loan-prim. res. signif. remodel >85% new
Chocaholic Offline
Gold Star
Joined: Aug 2005
Posts: 443
Northwest
I know its Friday...maybe that is reason for confusion.

Borrowers have owned the property for 5 years. Over 80% of the existing home will be demolished with the new structure added on. Borrowers are living in a rental for 14 months while 'new' home is constructed. We are only doing the construction phase and it is handled as a draw-down LOC... another bank has issued a committment for long term take out.

What disclosures are required if any? Usually const. loans require very little, but somehow this does not feel right in this situation.. Does Reg. Z apply, if yes does ROR... anything else?? We do so few of these, any help is appreciated.

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#1784497 - 02/09/13 02:55 AM Re: Const. loan-prim. res. signif. remodel >85% new Chocaholic
Richard Insley Offline
10K Club
Richard Insley
Joined: Oct 2000
Posts: 10,179
Toano, VA
Assuming the loan is made to the property owners (and not the builder), you have a plain vanilla extension of credit to consumers for a personal, family, or household purpose. All of Reg. Z will apply. Based on what you described, Appendix D should be able to generate the transaction disclosures. You will be taking a lien on the consumers' principal dwelling and this is not a RMT, so ROR will apply.
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