Pub. 5 2014 Issue 2

summer 2014 25 West Virginia Banker are executed, assuming the transaction is primarily for personal, family or household purposes, the transaction is subject to the regulation because in substance (if not form) consumer credit is being extended.” If a loan to a trust is for a consumer purpose, then Regulation Z, and all its glory, will apply. That being said, the TILA/RESPA Integrated Mortgage Disclo- sures rule applies to most closed-end mortgage loans, regardless of the bank’s asset size or pricing of the mortgage (i.e., Higher Priced Mortgage Loans). Because there is no small creditor exemption under this rule, all banks who originate closed-end mortgage loans must comply with these new mortgage disclosure regulations. Closed-end mortgage loans are consumer credit transactions se- cured by real property, including transactions such as: purchases, refinances and loans for second homes or vacation homes. One more thing that was slipped into this rule is that the disclosures are also required for construction-only loans, for loans secured by vacant land and for loans secured by 25 acres or more. Currently, those three types of loans are not within the scope of RESPA, but are subject to the new TILA/RESPA rule. While the final mortgage disclosures rule applies to most mort- gage loans that banks make, it does not apply to the following: • Home-equity lines of credit (HELOCs); • Reverse mortgages; • Mortgages secured by a mobile home or dwelling that is not attached to real property; and • Mortgage loans made by persons that are not “creditors” under Regulation Z. The new Integrated Disclosures must be provided by a bank that receives an application from a consumer on or after August 1, 2015. The bank may not use the new disclosures for applications received prior to August 1, 2015 because TILA/RESPA did not provide a provision for early compliance. Early use of the new disclosures would result in violation of the current TILA and RESPA rules. n Closed-end mortgage loans are consumer credit transactions secured by real property, including transactions such as: purchases, refinances and loans for second homes or vacation homes. www.CBBonline.com • 804.239.0452 Do Business With Someone Who Thinks Like You. Reach your target audience a ordably. advertise get results KRIS MONTIONE Advertising Sales 727.475.9827 or 855.747.4003 kris@thenewslinkgroup.com