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#1673587 - 03/06/12 02:55 PM Change in terms or new disclosures??
BankerChic24 Offline
Junior Member
Joined: Jul 2011
Posts: 45
Midwest
If a loan closed as a 3+1 ARM and the officer wants to change it to a 5+1 ARM to be compliant with a grant program requirement, can this be done on a change in terms form? Or, do we need all new discloures, including note and mortgage, basically a whole new closing)?
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#1673592 - 03/06/12 03:01 PM Re: Change in terms or new disclosures?? BankerChic24
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,832
Bloomington, IN
The 5 + 1 features of the variable rate program have not been previously disclosed. The addition of any variable rate features not previously disclosed constitutes a refinancing under 1026.20.
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#1673710 - 03/06/12 04:25 PM Re: Change in terms or new disclosures?? BankerChic24
dottiec Offline
Gold Star
Joined: Jul 2007
Posts: 305
Dan,
In reviewing Reg Z section 1026.20, it seems to exclude from the term refinance a rate reduction with a corresponding payment reduction. If we modify from a fixed to a variable rate and reduce the rate and the payment, what disclosures do we need?
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#1673754 - 03/06/12 05:12 PM Re: Change in terms or new disclosures?? BankerChic24
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 79,617
Galveston, TX
All of them, as Dan said: The addition of any variable rate features not previously disclosed constitutes a refinancing under 1026.20.
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