Organization credit for federally related mtg loan

Posted By: Compliance NABW

Organization credit for federally related mtg loan - 03/23/18 03:37 PM

If a loan is issued to a LLC for the purpose of doing a construction-perm loan for the primary residence of one of its guarantors, is this subject to RESPA only? "TRID" would not seem to apply as organizational credit is exempt from Reg. Z, but it would still seem to be a consumer purpose loan for a "federally related mortgage loan." Most of what I have come across states that the GFE/HUD now only applies to Reverse Mortgages, but is this another situation where using the GFE/HUD-1 would apply?
Posted By: rlcarey

Re: Organization credit for federally related mtg loan - 03/23/18 04:36 PM

Some people think so. But I have always been amazed at the logic that a business entity can borrow for a personal purpose. Sounds like the misuse of the LLC to me. How do they account for that?
Posted By: Compliance NABW

Re: Organization credit for federally related mtg loan - 03/23/18 06:11 PM

Likely agree. Perhaps it is just a single-asset entity to hold the RE for some reason.