Posted By: CompDat
Temporary financing discussion - 04/13/10 01:59 PM
I realize this is a subject that has been over played, but in response to my Bridge loan question the other day - depending on what regulators answer me back, I had always believed RESPA's definition of short term financing included construction loans, not converted to perm. financing, any bridge loan (left up to the FI to define). I also believed that short term financing was something that was replaced by longer time financing.
So along came a scenerio yesterday where a person was using a loan on their existing home, to be the downpayment of a home they were purchasing. I would normally call this a bridge loan and exempt this under the temporary financing definition, however if this was not defined by our FI as a bridge loan, and the loan would be paid off in full by the sale of the property, then I do not believe this is temporary because it would never be turned into longer term financing. Any thoughts?
So along came a scenerio yesterday where a person was using a loan on their existing home, to be the downpayment of a home they were purchasing. I would normally call this a bridge loan and exempt this under the temporary financing definition, however if this was not defined by our FI as a bridge loan, and the loan would be paid off in full by the sale of the property, then I do not believe this is temporary because it would never be turned into longer term financing. Any thoughts?