Skip to content
GeoDataVision
Thread Options
#1734837 - 08/24/12 05:16 PM John Warner applicable for renewal/extension??
AngelMae CRCM Offline
Member
Joined: Aug 2012
Posts: 68
Indiana
We had six month single pay loan for the purchase of the automobile (so John Warner does not apply since the auto purchased is securing the loan). However at the end of six months, the loan was refinanced/renewed/ extended for another three. A new note was issued...now the money is not technically purchase money...just a loan secured by an automobile...right? Now it is a John Warner loan and needs those disclosures? Is there an exemption to this type of situation that I am missing? I am leaning towards disclosures were needed for the second loan.

Return to Top
Lending to Servicemembers (SCRA, JWNDAA), War, Terrorism
#1734980 - 08/24/12 07:24 PM Re: John Warner applicable for renewal/extension?? AngelMae CRCM
RVFlyboy Offline
Power Poster
RVFlyboy
Joined: Oct 2000
Posts: 5,983
Soaring over Georgia
I think that depends on whether the loan was refinanced, renewed, or extended. They are not the same thing. If it was refinanced (new obligation satisfies and replaces existing obligation), then yes, I think it is a covered transaction. If renewed (typically done with an additional note form that does not replace the initial obligation) or extended (typically done with a modification or extention agreement), then I think the loan is still a purchase money loan and would not be a covered transaction. At least that's how I would look at it, but I don't know that there is anything that specifically states that is true.
_________________________
Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions

Return to Top
#1735073 - 08/24/12 08:52 PM Re: John Warner applicable for renewal/extension?? AngelMae CRCM
Andy_Z Offline
10K Club
Andy_Z
Joined: Oct 2000
Posts: 27,546
On the Net
I've seen nothing addressing this, but since the law is consumer protection, I'd tend to agree with Jim's analysis and say it is covered on a "new" loan as if those renewal terms were abusive, that would be an easy end-around the law and defeat the disclosure requirements.
_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

Return to Top
#1735307 - 08/27/12 02:46 PM Re: John Warner applicable for renewal/extension?? AngelMae CRCM
AngelMae CRCM Offline
Member
Joined: Aug 2012
Posts: 68
Indiana
That is what my line of thinking is in this case. Thanks for the input, I appreciate it!

Return to Top

Moderator:  Andy_Z