If we refinance 2 loans for a customer - one is secured by business real estate, the other their primary residence - into one loan secured by the residence will it be a TRID loan? The customer wants to roll into one ARM loan.
Posted By: raitchjay
Re: Will TRID apply? - 08/09/21 03:59 PM
Purpose drives Reg. Z coverage, not collateral. We would need more information about the purpose behind the loans being refinanced in order to answer.
They want to structure it as a business purpose loan.
Posted By: Dan Persfull
Re: Will TRID apply? - 08/09/21 04:23 PM
What is the purpose for the loan? How it is structured or its collateral does not determine the loan's purpose.
Posted By: raitchjay
Re: Will TRID apply? - 08/09/21 04:39 PM
We really need to know what the purpose was for the 2 loans being refinanced.
Posted By: Skittles
Re: Will TRID apply? - 08/09/21 04:43 PM
I'm sure they do want to originate it as a business purpose loan, but that doesn't mean that the actual purpose is business related. You need to respond to Dan's question above to determine your answer.
You also reference an ARM product. Does your bank originate ARM business loans?
Posted By: RR Joker
Re: Will TRID apply? - 08/12/21 02:10 PM
To add a key word, what is the primary purpose. Rolling two loans together with potentially different ORIGINAL purposes is tricky. Which one outweighs the other? [most money owed]. Is the business still viable, or are they now having to pay it back personally because the business went under?
To err on the biggest side of caution, you will treat it as personal if you can't justify the primary purpose being business related. You might also suggest they confer with their tax advisor.