I know that whenever a variable rate feature is added to a fixed rate mortgage, it is considered a refinance, and new disclosures are required under Reg Z. Is it permissible to modify a fixed rate mortgage loan to an adjustable rate mortgage loan, as long as all required disclosures are given? Can a fixed rate note be modified to an ARM note? No new money. Does anyone do this? What are the compliance implications?

Whether you can do it and how are questions for your legal counsel. Other than Reg. Z and RESPA, you should be thinking about the flood insurance regs and fair lending.