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New TRID disclosures- Reg Z

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Question: 
Does a loan to a consumer to purchase vacant land for investment fall under needing the new TRID disclosures?
Answer: 

The use of the word "investment" when describing property does not really provide enough information. Investment property is not exempted under the rental property rules as if you are renting the properties (1026.3(a)- Comment 4 & 5). The transaction must generally pass the general business purpose test in order to exempt investment property from Regulation Z (1026.3(a)- Comment 3).

So, if I is was just a consumer buying one house to flip to make some money, it would be considered a personal investment and thus consumer purpose. If I bought houses on a regular basis to flip and derived a portion of my on-going income from this endeavor, then it would pass the general business purpose test.

First published on 02/27/2016

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