Home Equity Closed-end Loan Disclosures

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Question:

I have a RESPA question. Do we need to give all the disclosures such as early TIL, GFE, Info Booklet and the servicing disclosure for a home equity closed-end loan?

Answer:

Assuming the loan is for consumer purposes and is secured by a lien on a 1-4 family residential dwelling, RESPA would apply. You have to look at each requirement separately as they have different standards for applicability. Of the disclosures you list, here would be the status in a closed-end home equity loan:

Early TIL: not applicable; only applies to loans for the purpose of purchasing or initial construction of and secured by the consumer's principal dwelling.
GFE: applicable
RESPA Settlement Costs Booklet: not applicable; only applies to purchase-money loans subject to RESPA.

Servicing Transfer Disclosure

depends on lien position; this requirement is only applicable to first lien loans. If your home equity loan is a subordinate lien, it would not apply.

First published on BankersOnline.com 8/06/07