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Rules for Loan on a Principal Dwelling to a Trust

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When you are doing a loan on a principal dwelling to a Trust (to purchase the dwelling to live in) would this be a consumer transaction and would they need to sign a TIL closing statement?

How can an entity (trust) have a principal dwelling? If the dwelling will be owned by a bona fide trust (as opposed to a land trust), and the loan is to the trust (with or without the personal guarantees of the trustees), the loan will not be subject to TILA or Regulation Z, because it is an extension of credit to other than a natural person (see Section 1026.3(a)(2)).

First published on 12/5/11

First published on 12/05/2011

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