A customer of ours had a HELOC secured by both their primary residence as well as a trust account. We recently did a refinance of the first mortgage which required our customer to remove the lien from the property on the HELOC due to LTV issues. We re-wrote the HELOC into a trust secured line with the same rate and maturity date. The mortgage refinance closed late last month.

Our customer would now like to attach a mortgage on the primary residence to the trust secured line of credit for tax purposes. Are we able to accomplish this with a modification or would we need to re-write loan back to a HELOC? There's not sufficient equity in the property to support the line (loan is fully secured by the trust account, property would technically be ABC). I know we'll need ROR regardless.

If you attach the dwelling to the open-end LOC, regardless if it's ABC or not, and it's for consumer purposes it will meet the definition of a HELOC and the applicable disclosures will need to be given.

Thanks Dan, that is the route we will be taking.