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1st & 2nd Deed of Trust-RESPA Reg Z Apply?

We are making a 1st deed of trust loan to purchase a primary residence and a second deed of trust loan for renovations on a 12 month interest only loan (to be refinanced on permanent financing with same lender at maturity by adding 1st & 2nd together). Does RESPA & REG Z both apply...and if so, can you make a 12 month interest only loan if it is a HOEPA loan?

Answer from Jim: For RESPA, it sounds like both the 1st and 2nd would be temporary financing and therefore would both be exempt. I'm not sure about the HOEPA question.


Answer from Andy: If this is not an RMT transaction it may not fit under the exceptions.
This section does not apply to the following:
(i) A residential mortgage transaction.
(ii) A reverse mortgage transaction subject to Section 1026.33.
(iii) An open-end credit plan subject to subpart B of this part.

First published on 2/25/13

First published on 02/25/2013

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