We did a C/P loan last year and the TIL reflected a rate of 6.5% for 360 mo with IO pmts for the construction period, then P&I beginning in Feb 2011.

We are ready to modify to perm financing now (closing next week) and need to provide a new TIL. The rate will be 5% with PITI pmts for the remaining 349 mo.

When we prepare the TIL...we should reference the PPFC's that were used when the loan was originated, right?

If you did a construct/perm loan, why is there another closing??

What do you mean modify to perm financing? Wasn't the perm part of the loan alrady set in stone in the original note? Wouldn't this just be a modification?

The TIL from the closing said the rate was 6.5% for the life of the loan with IO pmts during construction, then P&I; BUT the actual Note was for 6.5% IO for the entire 360 mo!

We are just going to do a modification to 5% fixed rate for the remainder of the term with P&I payments.

A true modification is not a refinance unless it makes some specific criteria and it would not trigger redisclosure. You can refer to 226.20 for more details.

There seems to be much confusion on modifying construction perm loans. We do our CP loans the same way. We finally stopped issuing a revised TIL at modification because we were also told that modification is not a reason to redisclose. Doesn't seem right. Anyone else have any input on disclosing on CP loans with modifications to the permanent terms?

Any modification to any consumer loan that does not meet the definition of a refinancing under 226.20 does not require disclosure under Regulation Z.