Balloons and RESPA

Posted By: mdog76

Balloons and RESPA - 09/27/11 01:40 PM

Is there a final word on if a balloon loan qualifies for RESPA?

Thanks
Posted By: Dan Persfull

Re: Balloons and RESPA - 09/27/11 01:46 PM

A balloon loan, if for a consumer purpose and is secured by 1-4 residential real property, is and always has been subject to RESPA.
Posted By: mdog76

Re: Balloons and RESPA - 09/27/11 01:55 PM

I misunderstood the question someone wanted to know. Is it o.k. to do a balloon loan on RESPA? If so, is there a prefered term?

Thanks.
Posted By: Dan Persfull

Re: Balloons and RESPA - 09/27/11 02:03 PM

I'm still not sure what is being asked. If the loan is a consumer purpose loan secured by a 1-4 residential real property you have no choice but to provide the required RESPA disclosures.

Are you maybe referring to the limitations for balloon loans in Reg Z in relation to HOEPA loans and HPMLs? If so review 226.35 and 226.32 and their Commentaries.