ATR for modular home secured by bare land

Posted By: ns

ATR for modular home secured by bare land - 07/27/17 08:07 PM

Borrowers want a closed-end, multiple-advance loan for 6 to 9 months when purchasing a modular home that is secured by bare land. When construction is complete on the modular home, they would like to set up annual payments that are amortized over 15 years with a 5 year balloon. However, LaserPro is not allowing that, only a 7/1 or 10/1 ARM loan.

Would ATR apply?

I need help interpreting 1026.43 because I'm understanding ATR would not apply to this loan as it is secured by bare land which is exempt under 1026.43 (a) yet would the General ATR Credits listed under 1026.43 (c) require ATR? Please help!
Posted By: rlcarey

Re: ATR for modular home secured by bare land - 07/27/17 08:11 PM

At what point of time are you taking the modular home as collateral?
Posted By: ns

Re: ATR for modular home secured by bare land - 07/27/17 09:14 PM

The bare land will always be used as collateral.
Posted By: rlcarey

Re: ATR for modular home secured by bare land - 07/27/17 09:16 PM

Wait a minute - you said a modular home - is it going to remain personal property and not secure the transaction?
Posted By: ns

Re: ATR for modular home secured by bare land - 07/28/17 02:44 PM

Correct. So since there is no dwelling to secure would it be exempt from ATR requirements?
Posted By: rlcarey

Re: ATR for modular home secured by bare land - 07/28/17 02:56 PM

With no dwelling as security it would not be a covered transaction.

1026.43(b) Definitions. For purposes of this section:

(1) Covered transaction means a consumer credit transaction that is secured by a dwelling,
Posted By: ns

Re: ATR for modular home secured by bare land - 07/28/17 02:57 PM

Perfect. Thank you! I appreciate the guidance.
Posted By: RR Joker

Re: ATR for modular home secured by bare land - 08/01/17 03:33 PM

I would like to know how in the heck a modular home can be excluded. It's not chattel property. Titles, even if in existence to move sections on a chassis, are not maintained on the finished product. Is this different in some states??