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What types of transactions are included as mortgage loan transactions under the Act?

The Act covers loan transactions, home improvement contracts that are secured by first liens, subordinate liens, or other liens, and land contracts on real property located in Michigan and used by the applicant or borrower as its principal dwelling, and which real property is designed for occupancy by 4 or fewer families. However, the statute does not cover the following loan transactions:

  • Loans in which the loan proceeds are used to purchase a dwelling. These loans are sometimes referred to as "purchase money loans."
  • Reverse mortgages loans.
  • Open-end credit in which the lender reasonably expects the borrower to access multiple advances.

In essence, the Act covers first lien mortgage loans (other than those to acquire a dwelling), closed end refinance transactions, subordinate lien mortgage transactions, home improvement contracts in which a first or subordinate lien is taken on real property (other than home equity lines of credit), and land contracts in refinance transactions.