RESPA Reporting

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Question:

The bank is making a loan to a consumer to purchase a lot. The collateral for the loan is another lot with a dilapidated house on it, which is to be torn down. Our appraisal states that it is subject to the old house being torn down. I know the loan is subject to Reg. Z, but is it subject to RESPA?

Answer:

RESPA applies when you have a lien on a 1-4 family [dwelling]. If the "house" is dilapidated and no one can/will dwell in it, then I don't think you have a dwelling secured loan. I would be sure to document that this "building" is not a "dwelling."

First published on BankersOnline.com 4/25/11