RESPA: Land, Loans, & Mobile Homes

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Question:

If a customer owns the land that a single wide mobile home is located on, and the loan will be secured by both the "Land" and the mobile home, is this type of loan covered under RESPA and REG Z Section 226.19? What disclosures would be required?

Answer:

.19 is addressing a residential mortgage transaction. .2 defines this as a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained in the consumer’s principal dwelling to finance the acquisition or initial construction of that dwelling.

Assuming you are financing the mobile home, the dwelling, both RESPA and Reg. Z will apply.

From RESPA, Section 3500.5, If a loan for a structure or manufactured home to be placed on vacant or unimproved property will be secured by a lien on that property, the transaction is covered by this part.

First published on BankersOnline.com 3/10/03