Posted by GMann on September 15, 2004 at 09:11:24:
I am not an attorney and this is not legal advice…Seek an attorney for legal advice.
With that being said, residential (1-4 units) properties should always follow RESPA laws (federal mortgage laws), regardless of occupancy. The grey area here is when a mortgage company lends the money to a business/corp. on a residential property (1-4 units)…Commercial loan???(largely unregulated).
All lenders have to pre-disclose their terms regardless of what type of financing it is (mortgage, auto, credit card).
Just get a GFE. If they won’t give one, you may want to question the transaction.
Posted by Chris on September 14, 2004 at 08:30:04:
Where can one read up on the regulation in CA? I was wondering about disclosure, copies, cancellation within 24 hours? The thing is, I didn’t even get copies of the contract and never received a written summary of the fees and their breakdown. Moreover, the construction loan is gonna start in 8 days and the building permit isn’t even back. None of this is good :–(((
The lender should know their business and run it cleanly.
I would also expect you to know your business and to do the same. It
sounds like you have created some problems with bad timing/poor
planning. If the mistake was your mistake I would find a way to keep
up the payment or repay the loan rather then try to wiggle out of the
deal.
HM loans are expensive. It should have been figured in as a cost of the
project. If you failed to make the numbers add up, consider it a
learning experience and move forward. One of the things that you want
to be known for is your integrity and your ability to perform. If you get
a reputation for backing out of deals and blaming the other side when
you get in a jam you will find it gets harder to find money in the future.
Yes, I do not know the whole picture. I just am reacting to what you
posted. As someone who will consider making loans on deals I look
beyond the deal to the person to see if they are someone I want to deal
with. When I know I can count on them to perform I am more willing to
move quickly, etc.
Posted by Chris on September 14, 2004 at 21:57:34:
Thanks! Another oddity just occured to me. The lender did not get anything notarized - and we are talking 2 construction loans for spec houses @ $ 93,750 each, 15% interest. A month ago, a different loan agreement was notarized and the broker is using this old notarized signature for a completely different size of home and loan. And the money will be released on the 23rd, so I anticipate a frantic request to rush into their office anytime soon
In this specific case define residential. I believe (maybe incorrectly) the
Good Faith applies to a home that a person expects to occupy and not
a raw piece of land that is being developed.
To extend this a bit further, if I was buying a NOO (a rental) does the
good faith apply there (assume a 1-4 residential).
