Posted By: Love Cruising
Business Entity - Second Home - 06/29/15 07:00 PM
We have a customer buying a residential condo, it will be under a business name and the consumer will be the guarantor. They may also use the property as a second home, would it require disclosures.
Posted By: rlcarey
Re: Business Entity - Second Home - 06/29/15 07:10 PM
No, but how can the "business" do this transaction as a business purpose loan? Is the use of the "second home" going to be a taxable event for the consumer? If I was in your shoes, I would need to figure out how the business expects to account for this transaction, the impact of such a transaction on the viability of the business, and make sure that the consumer is not running this transaction through the business for other various nefarious purposes.
Posted By: Love Cruising
Re: Business Entity - Second Home - 06/29/15 07:15 PM
This borrower has several investment properties, but they will be using this one as a second home since the property is by the beach. I was just concern whether to require disclosures.
Posted By: Love Cruising
Re: Business Entity - Second Home - 06/29/15 07:17 PM
This borrower has several investment properties, but they will be using this one as a second home since the property is by the beach. I was just concern whether to require disclosures.
Posted By: rlcarey
Re: Business Entity - Second Home - 06/29/15 07:20 PM
The borrower is an entity - loans to entities (outside of the limited trust exceptions) are not covered under Regulation Z.
Posted By: Help!!!
Re: Business Entity - Second Home - 06/29/15 07:26 PM
I have a customer buying a place on the lake, would this be considered a second home? I can't remember the maximum number of days a person can stay in the property before it's considered a primary residence.
Posted By: rlcarey
Re: Business Entity - Second Home - 06/29/15 07:29 PM
14 days a year and it is considered owner-occupied under Regulation Z.