Last Month's Q&A Answered
Tuesday, July 16, 2013 at 10:58AM by Banking Spectrum The following question appeared in the Q&A section of Banking Spectrum's June 2013 Report Bulletin. Compare your answer to the correct answer provided below.
Q: We are making a loan to a buyer of a modular home who will place the home on a parcel of land that he does no own. Rather, the home will be placed on land that the borrower will be renting from the landowner. Our bank will not have a lien on the underlying property if we finance the purchase of the modular home. Is this transaction covered by Regulation Z and RESPA?
A: Yes as to Regulation Z and no as to RESPA. A mobile or manufactured home placed on land that is not owned by the borrower, and which is not secured by the bank’s lien, is not a covered RESPA transaction. Click here to see the latest HUD RESPA Frequently Asked Questions dated March 23, 2010 question # 5.
Reader Comments