12 CFR 1024.5 : Coverage of RESPA.

(a)Applicability. and this part apply to federally related mortgage loans, except as provided in paragraphs (b) and (d) of this section.

(b)Exemptions.

(1) [Reserved]

(2)Business purpose loans. An extension of credit primarily for a business, commercial, or agricultural purpose, as defined by 12 CFR 1026.3(a)(1) of . may rely on in determining whether the exemption applies.

(3)Temporary financing. Temporary financing, such as a construction loan. The exemption for temporary financing does not apply to a loan made to finance construction of 1- to 4-family residential property if the loan is used as, or may be converted to, permanent financing by the same or is used to finance transfer of title to the first user. If a issues a for permanent financing, with or without conditions, the loan is covered by this part. Any construction loan for new or rehabilitated 1- to 4-family residential property, other than a loan to a bona fide builder (a who regularly constructs 1- to 4-family residential structures for sale or lease), is subject to this part if its term is for two years or more. A “bridge loan” or “swing loan” in which a takes a security interest in otherwise covered 1- to 4-family residential property is not covered by and this part.

(4)Vacant land. Any loan secured by vacant or unimproved property, unless within two years from the date of the of the loan, a structure or a will be constructed or placed on the real property using the loan proceeds. If a loan for a structure or to be placed on vacant or unimproved property will be secured by a lien on that property, the transaction is covered by this part.

(5)Assumption without lender approval. Any assumption in which the does not have the right expressly to approve a subsequent as the borrower on an existing . Any assumption in which the 's permission is both required and obtained is covered by and this part, whether or not the charges a fee for the assumption.

(6)Loan conversions. Any conversion of a to different terms that are consistent with provisions of the original mortgage instrument, as long as a new note is not required, even if the charges an additional fee for the conversion.

(7)Secondary market transactions. A bona fide transfer of a loan obligation in the secondary market is not covered by and this part, except with respect to ( 12 U.S.C. 2605) and subpart C of this part (§§ 1024.30-1024.41). In determining what constitutes a bona fide transfer, the will consider the real source of funding and the real interest of the funding . transactions that are table-funded are not secondary market transactions. Neither the creation of a , nor the first assignment of such loan or contract to a , is a secondary market transaction (see § 1024.2).

(c)Relation to State laws.

(1) that are inconsistent with or this part are preempted to the extent of the inconsistency. However, and these regulations do not annul, alter, affect, or exempt any subject to their provisions from complying with the laws of any with respect to practices, except to the extent of the inconsistency.

(2) Upon by any , the is authorized to determine if inconsistencies with exist; in doing so, the shall consult with appropriate Federal agencies.

(i) The may not determine that a or regulation is inconsistent with any provision of or this part, if the determines that such law or regulation gives greater protection to the consumer.

(ii) In determining whether provisions of or regulations concerning business arrangements are inconsistent with or this part, the may not construe those provisions that impose more stringent limitations on business arrangements as inconsistent with so long as they give more protection to consumers and/or competition.

(3) Any may the to determine whether an inconsistency exists by submitting to the address established by the to an official interpretation, a copy of the in question, any other law or judicial or administrative opinion that implements, interprets or applies the relevant provision, and an explanation of the possible inconsistency. A determination by the that an inconsistency with exists will be made by publication of a notice in the Federal Register. “Law” as used in this section includes regulations and any enactment which has the force and effect of law and is issued by a or any political subdivision of a .

(4) A specific preemption of conflicting regarding notices and disclosures of mortgage transfers is set forth in § 1024.33(d).

(d)Partial exemptions for certain mortgage loans. Sections 1024.6, 1024.7, 1024.8, 1024.10, and 1024.33(a) do not apply to a federally related mortgage loan:

(1) That is subject to the special disclosure requirements for certain consumer credit transactions secured by real property set forth in , 12 CFR 1026.19(e), (f), and (g); or

(2) That satisfies the criteria in , 12 CFR 1026.3(h).