How to Document Loan that has Home as Collateral

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Question:

We have a borrower that is purchasing a house and borrowing the money from a family member. We will be doing the financing to pay back the family member and the house that was purchased will be the collateral for the loan. What is the best way to document this loan?

Answer:

This loan would be documented as any other consumer purpose cash out equity real estate loan would be. If you are not certain what documentation is needed then get with your supervisor, loan documentation supervisor, compliance officer or senior loan officer.

First published on BankersOnline.com 5/16/11