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#1810246 - 05/02/13 04:11 PM Mixed Purpose
GenerousLife Offline
Diamond Poster
Joined: Feb 2002
Posts: 1,466
USA
Borrower has a 30,000 balance on primary residence with another lender. Wants 60,000 for ag equipment purchases. We want the house as collateral, which would require us to pay off the other lender. Total loan would be $90,000.

Strictly speaking this could be commercial, but because of our requirement to have the home as collateral, I really am pressing to do this as a consumer loan.

Anyone with a different perspective?
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Lending Compliance
#1810261 - 05/02/13 04:34 PM Re: Mixed Purpose GenerousLife
KPOC Offline
Gold Star
KPOC
Joined: Jul 2012
Posts: 460
Greater Boston Area
Collateral does not matter for Reg. Z or RESPA. This sounds like a commercial purpose loan and therefore it would fall under the commercial exemption.

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#1810289 - 05/02/13 05:05 PM Re: Mixed Purpose GenerousLife
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,758
Florida
Like KPOC mentioned if the purpose is consumer it is subject to TiL, no matter where in the bank it is produced or underwritten. Reg Z is PURPOSE driven.
Consumer purpose = Yes
Not Consumer = No - refer to 1026.3(a) to determine if is exempt (and better to look in the commentary)
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