Re: vacant land exemptions


In section 3500.5 of RESPA it talks about the vacant land exemption from RESPA.

Any loan secured by vacant or unimproved property is exempt from RESPA, unless:
– Within 2 years from the date of the settlement of the loan;
– A structure will be constructed or a manufactured home placed on the real property using the loan proceeds; and
– The loan for a structure or manufactured home (aka mobile home) to be placed on vacant or unimproved property will be secured by a lien on the property.

The mention about the signed statement from the borrower is not a regulatory requirement. It is however a good idea and something that you can use to protect your financial institution. With the signed statement that shows that you’ve exercised good faith in excluding the loan from RESPA and should protect you from being potentially criticized.