RESPA Coverage

Coverage of RESPA can be found in Section 3500.5. RESPA applies to:

1. Consumer purpose loans;
2. Secured by a 1-4 family dwelling;
3. Lien on Dirt; and
4. < 25 acres.

RESPA does not apply to [Section 3500.5(b):

1. Liens on a residence located on > or = 25 acres (you can combine all land taken).
2. Business purpose loans (same as Truth in Lending - Regulation Z).
3. Prequalification applications - when a specific property has not been identified.
4. Temporary financing:
   • Less than two years, (such as a construction loan).
   • RESPA does apply if the loan may be converted to permanent financing by the same lender,
   • RESPA does apply if there is a title transfer.
5. Bridge loans.
6. Home Equity Lines of Credit (open-end, revolving).

First published on BankersOnline.com 6/14/10