RESPA & Vacation Homes

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Question:

If a consumer has a primary residence then purchases a vacation home and asks for a loan with the vacation home as collateral, does RESPA apply?

Answer:

Most likely. Here's my loose paraphrase of Section3500.5(a)&(b) the coverage and exemptions of RESPA. RESPA applies to all consumer purpose loans secured by a lien on a 1-4 family dwelling. RESPA does not apply if you don't have a lien on dirt, 25 acres or more or construction loans. I encourage you to read these sections for more details.

First published on BankersOnline.com 6/02/08