Okay....in my experience, we have always reported HELOC's that were converted to a closed-end HELOAN as a refinance. We gave TILA disclosures, etc. and reported it on our LAR. Examiners have agreed with our reporting of these on the LAR.

YET...I cannot find anywhere a solid opinion or commentary from the regulators that support this practice.

Anyone out there have any thoughts on this? Or, if you have something that supports the opinion that it should not be reported, that's fine too.

Refinancing a HELOC into a close-end dwelling secured loan would cause it to lose its open-end LOC option and would be reportable as a refinancing.

I am in total agreement and I am not sure why it's such a big debate....I have received several different answers on the subject...still with no solid authoritative answer.

So frustrating.

^^^^There's your solid authoritative answer.

Really - when it comes from Dan I am in total agreement.

You authoritative answer can be found in 203.2.

(k) Refinancing means a new obligation that satisfies and replaces an existing obligation by the same borrower, in which:
(1) For coverage purposes, the existing obligation is a home purchase loan (as determined by the lender, for example, by reference to available documents; or as stated by the applicant), and both the existing obligation and the new obligation are secured by first liens on dwellings; and
(2) For reporting purposes, both the existing obligation and the new obligation are secured by liens on dwellings.

The HELOC is a dwelling secured loan that has been refinanced into another dwelling secured loan. Since the new loan is no longer a HELOC it no longer is optional reporting and must be reported as a refinancing.

I agree with Dan. To say it another way, your answer comes in two parts: 1) The new loan "satisfies and replaces a loan secured by a dwelling to the same borrower." 2) The new loan is not a LOC so it does not qualify for the exception.

Therefore, the loan is reportable.

So, really there doesn't seem to me to be a valid excuse to NOT report it, by calling it a "modification." Yet, it seems to happen alot. I guess it's just a matter of whether the examiners feel like making it an issue or not?

You can't "modify" an open end loan into a closed end loan.

That's what I am saying. We are on the same page.

While we are on the "authoritative answers" can anyone point me in the direction of where I would find that Pre-approvals that are closed for incompleteness are not reported? I know that it's correct, but can't find the source.

It's in the Action Taken section of Appendex A of GIR. Page A-3 in my printed copy.