Consumer Loans vs Mortgages

Here's a good definition of a consumer loan:

What is a Consumer Loan?

As@Pete B. pointed out, there are some states (California loves to be the oddball, doesn't it?) that treat some loans in a more unconventional manner, but the gist of it is that a consumer loan is normally unsecured, meaning there's no collateral or lien associated with it. A signature loan would be a good example of a consumer loan. Many times, loans made by non-banks (finance companies that loan for consumer purchases, for instance) would be considered to be consumer loans.

I hope this helps.

Good luck!

The definition of "consumer loan" or "consumer transaction" is to be found in the UCC article of the state law code where the transaction takes place. See these from Washington state's UCC title 62A.1-201: (11) "Consumer" means an individual who enters into a transaction primarily for personal, family, or household purposes. (27) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, public corporation, or any other legal or commercial entity. Note that the term "individual" has several meanings depending on where the term is used. In my opinion per the ejusdem generis rule rule the term "individual" in the above definition is not necessarily a "human being" but even if so, that "natural person" is acting as or for a "sole proprietorship" or some other artificial "legal entity" "commercial entity".

I suggest that a very valuable truth is found in 12 U.S.C. sec. 343 which says:

"any Federal reserve bank may discount notes, drafts, and bills of exchange arising out of actual commercial transactions; that is, notes, drafts, and bills of exchange issued or drawn for agricultural, industrial, or commercial purposes, or the proceeds of which have been used, or are to be used, for such purposes, the Board of Governors of the Federal Reserve System to have the right to determine or define the character of the paper thus eligible for discount, within the meaning of this chapter.” [emphasis added]

I believe people interested in the question of consumer transaction ought to inquire of FRB and CFPB to get answer to the following question: I want to find out if "Notes, drafts, and bills of exchange" signed by a private natural man or woman, acting as and for him/herself, and not as a representative for a "housing developer” involved in housing “projects", in order for him or herself to obtain funds to purchase his/her own owner-occupied homestead dwelling house are ever allowed or are “lawful” for discounting under section 343?"

This is "Consumer Loan" as in a loan to a consumer as opposed to a commercial loan to a business for business purposes. In the context of mortgage lending, this means that 1) the loan is to an individual or certain specific types of trusts, 2) the property is for residential purposes, not office space and the like, and 3) single units in a Condo/Co-op or 1-4 unit properties as opposed to some 5+ unit apartment complex.