Bridge Loan Disclosures

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Question:

I have a loan application for a bridge loan. The customer wants to use their current residence as collateral to purchase a new residence. We will be taking a lst lien on the existing residence as well as a 1st lien on the new residence. The loan will be for 6 months, interest only. What type of disclosures do I need to prepare? Does Early TIL come into play? We will not be doing permanent financing.

Answer:

If you are not providing the permanent financing, then RESPA (the Preliminary TIL) does not apply. You need to give a RofR, as you have their existing residence, and a final TIL disclosure. Don't forget a flood determination on each property.

First published on BankersOnline.com 11/3/03