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#2054605 - 12/16/15 11:50 PM Heloc's and the new rate increase
Margarita Offline
Member
Joined: Oct 2005
Posts: 74
Wisconsin
We have a disagreement going on with the new rate increase announced today,of whether variable rate Heloc's must receive a change in terms notice. And if so, 15 days prior to the change or 15 days prior to the billing cycle?

1026.9(c)(1) of the Official Interpretation states: "no notice is of a change in terms need be given if the specific change is set forth initially, such as: rate increases under a properly disclosed variable-rate plan.....". We disclose that "the rate is tied to the index that will increase or decrease from time to time. Any increase in the period rate will take the form of higher payment amounts. Adjustments to the periodic rate and the corresponding APR resulting from changes in the index will take effect daily".

Looking for opinions.....

Thanks!

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#2054637 - 12/17/15 01:44 PM Re: Heloc's and the new rate increase Margarita
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 79,637
Galveston, TX
No notice is required. You already disclosed how and when the rate would change.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2054691 - 12/17/15 03:41 PM Re: Heloc's and the new rate increase Margarita
Margarita Offline
Member
Joined: Oct 2005
Posts: 74
Wisconsin
Thank you Randy! That is what I thought.

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#2054924 - 12/18/15 02:42 PM Re: Heloc's and the new rate increase rlcarey
PCBDebbie, CRCM Offline
100 Club
Joined: Aug 2015
Posts: 151
To add onto this discussion and ask another question if I may.

If we have applications in process and issued a 1003 disclosed at the previous prime rate of 3.25 should we send a new 1003 for these applications in process with the new 3.5 prime rate?

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#2054931 - 12/18/15 03:00 PM Re: Heloc's and the new rate increase Margarita
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 79,637
Galveston, TX
What does an application form have to do with the rate. Rates are disclosed on the LE and CD not applications.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2055007 - 12/18/15 06:22 PM Re: Heloc's and the new rate increase Margarita
PCBDebbie, CRCM Offline
100 Club
Joined: Aug 2015
Posts: 151
The 1003 application does include the rate. I know we are covered disclosure wise because our disclosure specifically states that the rate is based on the Prime Rate and it can adjust on a monthly basis.

My thought is as long as the final 1003 matches the loan approval and documents we would be ok.

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#2055057 - 12/18/15 08:44 PM Re: Heloc's and the new rate increase Margarita
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 79,637
Galveston, TX
There is no regulatory requirement to even have a 1003. If you have investor requirements, check with them. Otherwise you can make your own rules.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2056282 - 12/30/15 07:48 PM Re: Heloc's and the new rate increase Margarita
DeeGail Offline
New Poster
Joined: Apr 2015
Posts: 8
What about WI Statue 138.056 and the notice of interest payment changes for those helocs that may be a first lien? We are looking into what we need to do for this.

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#2058049 - 01/12/16 04:15 PM Re: Heloc's and the new rate increase Margarita
Beagles22 Offline
Power Poster
Joined: Jan 2004
Posts: 3,626
State of confusion
Yes, from what Wisconsin Bankers Association told us 138.056 does come into play on 1st mortgage HELOC loans, if the rate change causes an increase of the periodic payment other than the final payment you need to give a 15 day prior notice. If it does not increase the periodic payment then you have 30 days after the change to let them know, so your next HELOC statement should take care of that.

Hope this helps.
_________________________
Going to church doesn't make you a christian any more that standing in your garage makes you a car.

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#2064434 - 02/16/16 04:20 PM Re: Heloc's and the new rate increase Margarita
WIBanker91 Offline
100 Club
Joined: Nov 2011
Posts: 180
WI
Is it mailed15 days before the next payment or the rate change?

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#2064953 - 02/18/16 10:32 PM Re: Heloc's and the new rate increase Margarita
Beagles22 Offline
Power Poster
Joined: Jan 2004
Posts: 3,626
State of confusion
15 days before you area allowed to raise the rate.
_________________________
Going to church doesn't make you a christian any more that standing in your garage makes you a car.

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#2134554 - 06/15/17 06:58 PM Re: Heloc's and the new rate increase Margarita
DeeGail Offline
New Poster
Joined: Apr 2015
Posts: 8
Could I get some thoughts on the 1st lien notice requirements for WI .... do they apply to non owner occupied first lien Helocs?

Thanks

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