Prior to January rule changes, we offered our balloon payment borrowers with a balloon payment coming due to modify their contract by removing the balloon payment feature. We charged a nominial fee (< $100). No application process, just written acknowledgement of the desired change and payment of the fee would result in a modification to the contract. Some of the accounts were high cost mortgages.
1026.34(a)(7) now states a consumer of a high cost mortgage cannot be charged "...any fee to modify, renew, extend or amend a high-cost mortgage..."
This seems black and white to me, but an attorney has stated the following regarding our program: The rule [34(a)(7)] only applies for those transactions that involve an application taken or received January 10, 2014 and later. (If there is no application and the loan is dated before Januay 10, 2014 we could continue to charge the fee.)
I don't feel at all comfortable with this and would appreciate comment.