Does anyone have an example of the application disclosure for a HELOC that has a variable rate during the draw period which then converts to a fixed rate during the repayment period?

I'm having problems with the wording. If so could you please e-mail to rrussell@denalistatebank.com or fax a copy to (907) 458-7890.

Are there any BOL'ers who have HELOC's with a fixed rate repayment period?

It makes for an interesting interest rate risk scenerio that's for sure. But no - haven't seen one.

I tried to set one up this morning, but my software would not allow me to enter variable for the draw and fixed for the repayment. It was either one or the other.

You may have to employ Richard Insley or David Dickinson's services for this one.

I'm not sure it can be done. I looked into this a while back and I can't remember why, but we couldn't do it. I believe it's a change in terms that would require re-disclosure or something like that. Sorry, I can't put my hands on it right now and I have to leave. I'll check on Tuesday if you're still interested.

It's really not a problem contractually - not having an loan accounting system to handle it is a whole other issue however.

dpersfull,

What software do you use?

Sandra,

That would be great. I'm having a hard time convincing management that a variable rate repayment period would be easier.

I know I had some information on this somewhere, but I cannot locate it. You can't properly disclose an equity product that is adjustable during the draw period and fixed after that. How do you know what the fixed rate will be five or ten years from now? Anyway, look at Reg. Z 226.5b(f)Limitations on home equity plans. It says you cannot change the rate "by contract or otherwise" unless it's based on an index. I hope this helps.