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ROR Exempt for Mobile Home Primary Residence?

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Question: 
Customer owns 2 acres of bare land. Our loan is to purchase a mobile home to place on this land to be their principal residence. Our system says that ROR applies but our LOs seem to think different. Is ROR exempt on loans of this nature?
Answer: 

Residential Mortgage Transactions are exempt from rescission - §1026.23(f)(1). Look at §1026.2(a)(24) for the definition of Residential Mortgage Transaction. There you'll find that the definition includes a "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". From your description it sounds like you will have a purchase money security interest in the mobile home that will be the consumer's principal dwelling. Therefore it sounds to me like rescission would not apply to this transaction.

First published on 05/19/2014

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