Posted By: mdog76
Loan Purpose - 12/29/15 05:28 PM
A customer has been in a lease to own agreement and is getting a loan to pay the rest of the lease off. Would the loan be considered a purchase or refinance?
Thank you
How do you treat a land contract payoff at your bank?
Treat this the same way.
Remember, you should give Right to Cancel on this too.
This is the applicable citation that supports the fact that ROR is required on a payoff of a land contract.
1026.2(a)(24)(5). Acquisition. i. A residential mortgage transaction finances the acquisition of a consumer's principal dwelling. The term does not include a transaction involving a consumer's principal dwelling if the consumer had previously purchased and acquired some interest to the dwelling, even though the consumer had not acquired full legal title.
Subsection (ii). Examples of new transactions involving a previously acquired dwelling include the financing of a balloon payment due under a land sale contract ..........However, the rescission rules of §§1026.15 and 1026.23 do apply to these new transactions.