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Principal Dwelling Within Tila

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Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
So,
from a conversation earlier in the week, regarding REO appraisals and the Truth in Lending Act, the section of the law concerning C&R was copied and pasted, and then questioned.

The threads were removed, before I could answer the question, so here is the response to:

12 CFR § 226.42 Valuation independence.

§ 226.42 Valuation independence.
https://www.gpo.gov/fdsys/pkg/CFR-2014-title12-vol3/pdf/CFR-2014-title12-vol3-sec226-42.pdf

(
a) Scope. This section applies to any
consumer credit transaction secured by
the consumer’s principal dwelling
.

(b) Definitions. For purposes of this
section:

(1) ‘‘Covered person’’ means a creditor
with respect to a covered transaction
or a person that provides ‘‘settlement
services,’’ as defined in 12

U.S.C. 2602(3) and implementing regulations,
in connection with a covered
transaction.

(2) ‘‘Covered transaction’’ means an
extension of consumer credit that is or
will be secured by the consumer’s principal
dwelling, as defined in
§ 226.2(a)(19).

THE definition cited in the law is for "dwelling" while the argument was being made that the term is "principal dwelling".

So I have the answer to why, the Truth in Lending Act does not define "principal dwelling", only dwelling.

It is found here:

Appraisals for Higher-Priced Mortgage Loans

A Rule by the Comptroller of the Currency, the Federal Reserve System, the National Credit Union Administration, the Consumer Financial Protection Bureau, and the Federal Housing Finance Agency on 02/13/2013

Principal Dwelling
As in the proposal, the final versions of the OCC's and the Board's publication of the definition of “higher-priced mortgage loan” rules cross-reference the Bureau's Regulation Z and Official Staff Interpretations for the meanings of “principal dwelling,” “average prime offer rate,” “comparable transaction,” and “rate set.” See 12 CFR 34.202, comments 1 (OCC); 12 CFR 226.43(a)(3), comments 1, 2, 3, and 4 (Board). The Regulation Z comments to which the OCC's and Board's rules cross-reference regarding the meaning of “average prime offer rate,” “comparable transaction,” and “rate set” are described above. See 12 CFR 34.202, comment1 (OCC); 12 CFR 226.43(a)(3), comments 2, 3, and 4 (Board). A proposed comment cross-referencing the Bureau's Regulation Z for the meaning of the term “principal dwelling” is not adopted in the Bureau's version of the final rule because the meaning of “principal dwelling” in new § 1026.35(a)(1) is understood to be consistent within the Bureau's Regulation Z. The OCC's version of this final rule also does not include the proposed comment specifically cross-referencing the meaning of “principal dwelling” in the Bureau's Regulation Z because the OCC is adopting the Bureau's definition of HPML, which the Bureau's definition of “principal dwelling.” See 12 CFR 34.202(b); see also 12 CFR 34.202, comment 1. The proposed comment is, however, adopted in the Board's publication of the rule. See 12 CFR 226.43(a)(3), comment 1. Consistent with the proposal, in the final rule, the term “principal dwelling” has the same meaning as in § 1026.2(a)(24) and is further explained in existing comment 2(a)(24)-3. Consistent with comment 2(a)(24)-3, a vacation home or other second home would not be a principal dwelling. However, if a consumer buys or builds a new dwelling that will become the consumer's principal dwelling within a year or upon the completion of construction, the comment clarifies that the new dwelling is considered the principal dwelling.
https://www.federalregister.gov/doc...9/appraisals-for-higher-priced-mortgage-loans

There is the answer.
C&R applies to REO appraisal work, for homes that are not vacation or second homes, however, OCCUPANCY is not a part of the dwelling definition.
The other laws referenced by the OCC are below.

Electronic Code of Federal Regulations
e-CFR data is current as of October 11, 2016
Title 12Chapter I → Part 34

upload_2016-10-13_0-47-47.png
http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr;sid=d654949afcd979c6a863e628c3e29a08;rgn=div5;view=text;node=12:1.0.1.1.32;idno=12;cc=ecfr#se12.1.34_1202


OH and here is THAT APPRAISAL REQUIREMENT, which supposedly does not exist.:


Electronic Code of Federal Regulations
e-CFR data is current as of October 11, 2016
§226.43 Appraisals for higher-priced mortgage loans
http://www.ecfr.gov/cgi-bin/text-idx?rgn=div5&node=12:3.0.1.1.7#se12.3.226_143


(c) Appraisals required—(1) In general. Except as provided in paragraph (b) of this section, a creditor shall not extend a higher-priced mortgage loan to a consumer without obtaining, prior to consummation, a written appraisal of the property to be mortgaged. The appraisal must be performed by a certified or licensed appraiser who conducts a physical visit of the interior of the property that will secure the transaction.

§ 1026.2
https://www.gpo.gov/fdsys/pkg/CFR-2012-title12-vol8/xml/CFR-2012-title12-vol8-sec1026-2.xml
(24) Residential mortgage transaction means a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained in the consumer's principal dwelling to finance the acquisition or initial construction of that dwelling.

Yup that's it.

C&R for REOs that are not vacation homes.


.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
A pastiche of regulations verbiage you cut and paste that does not support your position. TMD , an attorney who knows how to understand laws said you were wrong.

(2) ‘‘Covered transaction’’ means an
extension of consumer credit that is or
will be secured by the consumer’s principal
dwelling, as defined in
§ 226.2(a)(19).



THIS 2) above, extension of consumer credit, is what exempts bank owned REO properties from C and R. You go on about dwelling vs principal dwelling, whether either term is used, if the transaction purpose is NOT an extension of consumer credit, then the appraisal is not covered by C and R .

A bank ordering an REO appraisal of a property for asset evaluation or opinion of market value when no consumer loan (credit) is involved, THAT (no extension of consumer credit) is the differential for C and R coverage, not whether it is called a dwelling or principal dwelling, though in the pertinent section above, it is called consumer's principal dwelling.

If appraisers are going to object to C and R not being followed when it should be (covered transactions; an extension of consumer credit, ) it undermines credibility when an appraiser takes an incorrect position about when C and R is not covered.

I hope I can follow TMD's lead and not get embroiled with you, he wisely cut off responding after pointing out to you several times why your position was wrong .If you respond, I hope you can argue positions and not personalities, if you start using insults, such as saying things like "read very slowly ", I will report this thread to the head surfer moderator and request it be closed.

From your own pasting, it refers to a mortgage loan to a consumer (extension of consumer credit ) which is what makes it covered transaction, again, the pertinent fact if whetehr an appraisal is covered for C and R is the extension of consumer credit, not whether the dwelling is or is not a vacation home, or high end home .

"Electronic Code of Federal Regulations
e-CFR data is current as of October 11, 2016
§226.43 Appraisals for higher-priced mortgage loans
http://www.ecfr.gov/cgi-bin/text-idx?rgn=div5&node=12:3.0.1.1.7#se12.3.226_143


(c) Appraisals required—(1) In general. Except as provided in paragraph (b) of this section, a creditor shall not extend a higher-priced mortgage loan to a consumer without obtaining, prior to consummation, a written appraisal of the property to be mortgaged. The appraisal must be performed by a certified or licensed appraiser who conducts a physical visit of the interior of the property that will secure the transaction."
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
A pastiche of regulations verbiage you cut and paste that does not support your position. TMD , an attorney who knows how to understand laws said you were wrong.
."
There weren't any opinions.
Once you take a class in remedial reading, and read all these laws,

you can get back to us on what you think,

Which,

Doesn't matter, as the cut and pastes are the laws that were published in the federal register.

He asked why it wasn't there,
I provide the citation.

See how that works J??
Facts, not opinions.


.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Once you take a class in remedial reading

You just did what I asked you not to do, start with insults of a personal nature, moderator, please shut down the thread. (and of course "the citation" you cited did not support your position)
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
Once you take a class in remedial reading

You just did what I asked you not to do, start with insults of a personal nature, moderator, please shut down the thread. (and of course "the citation" you cited did not support your position)

I'm SORRY J, did you accuse me of posting an opinion, and then defer to TimD as a current attorney??

And expected that it was not an insult to my intelligence to call the posting of a fact an opinion, so that should just slide by without comment?

Your request was rejected.

And to clarify, yet again.

I did not have an opinion.

I merely posted the answer to Tim's question, concerning why The TILA said "principal dwelling", yet called for the definition to be only "dwelling".

Read the law, and post anything within the law, you disagree with.


.

.

.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
TMD , an attorney who knows how to understand laws said you were wrong.
And as we know, all attorneys are flawless and they are always right and never lie.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
And Tim did not say that anyway.

He merely questioned why the TILA says the section applies to consumer credit transactions for principal dwellings, and why the law cites the definition of dwelling without the adjective.

Tim did not offer any opinion of right or wrong. He merely offered a question.

But we can't cite that as Mich CG removed those posts in favor of his opinion.

God forbid there should be facts that are not in agreement with someone's opinion.

.
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
Marion-

Are you saying that REOs are covered transactions as far as C&R goes?

No authority makes that argument. I think I see how you are interpreting the regulations, but I disagree.

An appraisal assignment revolving around an REO is the result of a default on the mortgage agreement. There is no consumer credit associated with this transaction (i.e., directly related to the valuation). The consumer credit associated with the transaction was on the initial loan/refinance or work-out. Regardless if the property has already transferred (which is caused by a court action or by a contractual right, and not part of a consumer credit-extension action) or is being valued to consider the lien-holder's options, neither valuation scenario involves consumer credit.
Similar to REOs not being a covered transaction, the same goes for portfolio-monitoring purposes. A lien holder can, periodically, update the value of its portfolio and that portfolio may include properties that would fall under the 'principle dwelling' filter. But, since they are not related to an extension of consumer credit, they would not be a covered transaction.

I'm guessing I will not change your mind (which is fine) and I'll continue to read this thread.
No authoritative source makes the argument that an REO appraisal valuation (pre or post) is a result of a consumer-credit extension and therefore falls under the "covered transactions" definition in the rules (there are more filters than just "consumer"; i.e., principle dwelling, etc).. But an REO valuation assignment disqualifies itself from C&R based on the most broad filter- "consumer credit transaction".

My 2-cents! :cool:
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
Marion-

Are you saying that REOs are covered transactions as far as C&R goes?

No authority makes that argument. I think I see how you are interpreting the regulations, but I disagree.

An appraisal assignment revolving around an REO is the result of a default on the mortgage agreement. There is no consumer credit associated with this transaction (i.e., directly related to the valuation). The consumer credit associated with the transaction was on the initial loan/refinance or work-out. Regardless if the property has already transferred (which is caused by a court action or by a contractual right, and not part of a consumer credit-extension action) or is being valued to consider the lien-holder's options, neither valuation scenario involves consumer credit.
Similar to REOs not being a covered transaction, the same goes for portfolio-monitoring purposes. A lien holder can, periodically, update the value of its portfolio and that portfolio may include properties that would fall under the 'principle dwelling' filter. But, since they are not related to an extension of consumer credit, they would not be a covered transaction.

I'm guessing I will not change your mind (which is fine) and I'll continue to read this thread.
No authoritative source makes the argument that an REO appraisal valuation (pre or post) is a result of a consumer-credit extension and therefore falls under the "covered transactions" definition in the rules (there are more filters than just "consumer"; i.e., principle dwelling, etc).. But an REO valuation assignment disqualifies itself from C&R based on the most broad filter- "consumer credit transaction".

My 2-cents! :cool:


I'm not offering 2 cents.

You can keep yours.

If you wish for me to post the laws, which are current as of October this year,

I'm more than happy to do that again.

And with that I would include some copy and paste from the IFR from it's recording in the public register.

But I'm not going to argue opinions when what is published is published in black and white plain English.

.
 
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