Notice: Function _load_textdomain_just_in_time was called incorrectly. Translation loading for the wp-migrate-db domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /srv/app/gotoiba-dev/htdocs/web/wp-includes/functions.php on line 6121
If a loan is secured by a land trust, and not directly secured by any real property, would the flood regulations apply to that loan? – IBA Compliance Connection

IBA Compliance Connection

Your go to source for compliance!

If a loan is secured by a land trust, and not directly secured by any real property, would the flood regulations apply to that loan?

—

by

An assignment of beneficial interest (ABI) in a land trust might not be considered a designated loan. Under the Illinois Land Trust Recordation and Transfer Tax Act and Land Trust Beneficial Interest Disclosure Act, the beneficiary’s interest in a land trust is defined as “personal property only.” 765 ILCS 405/1765 ILCS 420/2. Further, the Interagency Questions and Answers Regarding Flood Insurance state that where a lender takes a note as collateral on a loan, rather than securing the loan directly by the real estate, the loan is not a designated loan subject to the flood insurance requirements. Question 42, 74 Fed. Reg. 35914, 35941 (July 21, 2009). By analogy, where a lender takes a personal property interest in a land trust as collateral rather than securing the loan directly by the real estate, the loan might not be considered a designated loan.