GFE/Early Truth Disclosures for Land Investment?

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Question:

We received an application from our customers to purchase 12 acres of land. The primary use of the land is for investment. In the credit memo, the loan officer noted that it is a possibility that they could someday build a house on it. That is not something that would happen soon. Do we need to give them a GFE and Early Truth in Lending disclosures?

Answer:

No. Refer to Section 226.19(a) in Regulation Z and then to Section 3500.2 in HUD's Regulation X for the definition of a Federally related mortgage loan.The purchase does however appear to be for a personal investment which would make it a consumer purpose loan and subject to TIL.

First published on BankersOnline.com 5/30/11