If you re-write a HOEPA violation loan, does that negate the ROR liability of the original? In other words - does liability die with pay-off?

Refinancing the loan would "cure" a previous ROR problem, however, keep in mind you have limitations for refinancing a HOEPA loan.

i.e. "can't re-write it within the 1st year unless it is in the customer's best interest"?

The loan officer wrote the loan under the wrong program. The correct program would give the customer a 4 point break in the rate. That is what we would like to do. I know we can't "fix" the HOEPA violation, but we want to do the right thing. Good plan?

Giving the borrower a 4 point break in the rate would definitely benefit the borrower, as long as your "new fees" (if any) would not negate the rate deduction.

Is 4 points in the regulation? Or is this just a good measure to go by.

Read 226.31 and 32 and find out.

The reg says you cannot refinance a HOEPA loan within the 1st year unless it is a direct benefit (not an exact quote) to the borrower and sure seems to me a 4 point reduction in the rate would be direct benefit to the borrower.

Paragraph 34(a)(3) Refinancings within one-year period.

1. In the borrower's interest. The determination of whether or not a refinancing covered by §226.34(a) is in the borrower's interest is based on the totality of the circumstances, at the time the credit is extended. A written statement by the borrower that "this loan is in my interest" alone does not meet this standard.

(i) A refinancing would be in the borrower's interest if needed to meet the borrower's "bona fide personal financial emergency" (see generally §226.23(e) and §226.31(c)).

(ii) In connection with a refinancing that provides additional funds to the borrower, in determining whether a loan is in the borrower's interest consideration should be given to whether the loan fees and charges are commensurate with the amount of new funds advanced, and whether the real estate-related charges are bona fide and reasonable in amount (see generally §226.4(c)).