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HELOC Modification - Extending the Draw Period
Answer by Randy Carey, BOL Guru
Guru Bios
Question: The draw period on an HELOC has matured and we would like to modify it to extend the draw period and avoid a new loan and disclosures. Does 226.5(b)(2) of Reg Z's commentary prohibit this?
Answer: If the HELOC has matured, anything will be considered a new plan or a finance transaction and require appropriate new disclosures. If it is renewed into a open-end credit product a new right of rescission will be required.
First published on BankersOnline.com 5/12/08
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