Land Purchase - opps theres a house on property

Posted By: Princess of Power

Land Purchase - opps theres a house on property - 08/05/14 12:00 AM

Have a loan application for purchase of land, loan structure interest only for 12 months, subject to rate change monthly. At end of 12 months we will do a construction loan to construct 2 homes (one for borrower to eventually use as a primary the 2nd for family & friends to visit). Just found out that there is an existing home on the land, which will be torn down at some point (don't know if during the 12 months or as part of the construction phase). Does RESPA apply to this and do the ETIL's need to be provided.
(P.S. - in my next work life I want to be in sales!!)
Posted By: Skittles

Re: Land Purchase - opps theres a house on property - 08/05/14 01:38 PM

I'm mulling this over in my head, but my first thought is I hope they got a flood determination.
Posted By: RR Joker

Re: Land Purchase - opps theres a house on property - 08/05/14 02:15 PM

I feel like you could call this one temporary since another loan will replace it.

Having said that...My flow chart does not allow me to qualify a loan as temp (For RESPA and Z) if we know we will be doing the takeout...this is a carryover from the FRB ATL's strict interpretation of the reg tho, I'm pretty sure.
Posted By: Princess of Power

Re: Land Purchase - opps theres a house on property - 08/05/14 03:30 PM

We do not do take outs or other perm financing & yes we have flood, just not certain that I need to figure out ETIL & GFE in the next 2 days
Posted By: RR Joker

Re: Land Purchase - opps theres a house on property - 08/05/14 03:33 PM

Quote:
At end of 12 months we will do a construction loan


According to what you said...you do!;)
Posted By: Princess of Power

Re: Land Purchase - opps theres a house on property - 08/05/14 05:49 PM

So if the initial loan is to be paid off by construction financing - no long term financing provided by our bank, each loan is not considered temporary?