Rescission & Land Only

A client has posed a question to me that they have received two different responses on. I know my answer, but wanted to check here to see how other people felt.

The bank is taking raw land as collateral on which the customer's mobile home (primary residence) sits. The bank has not taken a security interest in the mobile home.

Is rescission required?

I think the answer is: not if the mortgage SPECIFICALLY indicates that the structure is not part of the security agreement. I think it has to be very spelled out on the mortgage though. We'll see what the guru's have to add to that though Skittles!

Since there's no security interest in the customer's dwelling, I agree - no Rescission.

Reg. Z's rescission rule would not apply if a security interest is not taken in the borrower's primary residence.

Now with that said:

1. Are there any state rescission rules that may apply,

and

2. Is the MH consider real property instead of personal property.

When dealing with MHs it is very important to understand how MHs are treated under state statutes.

Thanks guys! That's what I thought (actually knew), but sometimes you need backup to get the point across.