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Temporary financing exemptions

Home Forums Truth in Lending/ Regulation Z Temporary financing exemptions

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  • #2347
    Anonymous
    Inactive

    you stated at your Respa review and update page 8 that on Temporary financing loans such as construction other than a bona fide builder that we need a commitment letter from the borrowers lender stating they will be doing the permanent financing. Do we need a letter in the file from our bank stating that we will only be doing the temporary financing?

    #2679
    JGo9
    Participant

    If I’m understanding your question correctly; you are asking if you need a letter from your bank to your bank that you are only doing the temporary (or construction) financing.

    I don’t think you are required to give yourself a letter stating that you are doing only the temporary financing. That being said I think that it would be prudent to document your loan file with the loan situation. That can be done via a letter, memo, or even an officer comment sheet, etc. That along with the commitment (aka take out) letter should make the situation and expectations clear to anyone who then reviews the file.

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