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#1292378 - 11/24/09 05:00 PM Is this a Mod and extension?
QueenBB Offline
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Joined: Jan 2006
Posts: 190
There is a 6 month, fixed rate loan on primary dwelling. Now, we want to "modify and extend" the loan to be a 3/1 30 year ARM. I believe that requires all new disclosures and documentation, new note, etc because it is adding an adjustable feature not disclosed earlier. It is basically a refinance. Am I on the right track? "Others" say it is going from a temporary loan to a permanent loan so it can be modified.

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#1292435 - 11/24/09 05:29 PM Re: Is this a Mod and extension? QueenBB
newyork Offline
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Joined: Aug 2008
Posts: 415
I believe, since you are doing a "New Note", it is considered a refinance. At least, that is what our examiners have explained the difference between a refinance and modification is.

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#1292549 - 11/24/09 06:45 PM Re: Is this a Mod and extension? newyork
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,844
Bloomington, IN
Under Reg Z the addition of a variable rate feature not previously disclosed is considered a refinancing and requires all new disclosures. See the Commentary to 226.20(a)(3)(ii)(B).
The opinions expressed are mine and they are not to be taken as legal advice.

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