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#2227307 - 12/12/19 09:36 PM HELOC Application Disclosure
Banker75 Offline
Member
Joined: Oct 2015
Posts: 93
I'm putting this out there for guidance as I have been asked this question. For our HELOC product, our term is 8 years. I have been asked if we still have to provide the historical example based on 15 years or if we can go 10 years since we offer a shorter term? For some reason, neither our examiners or external auditors have caught this in years past and I have a new auditor that is questioning this. Any guidance is appreciated.

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Lending Compliance
#2227310 - 12/12/19 09:47 PM Re: HELOC Application Disclosure Banker75
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,612
Galveston, TX
Paragraph 40(d)(12)(xi)

See comments 1 and 8
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2227314 - 12/12/19 10:21 PM Re: HELOC Application Disclosure Banker75
Banker75 Offline
Member
Joined: Oct 2015
Posts: 93
Thank you rlcarey. I appreciate your guidance on this.

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#2228974 - 01/14/20 05:00 PM Re: HELOC Application Disclosure rlcarey
ccman Offline
Platinum Poster
Joined: Sep 2007
Posts: 900
rl,

For some reason, our Laser Pro system produces the historical table with the notation that the index is based on the rate in effect as of July each year. Is there a particular reason for this? The table can be built using the same date each year per the rule cited above, right?

Thanks.

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#2228984 - 01/14/20 05:17 PM Re: HELOC Application Disclosure Banker75
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,612
Galveston, TX
Pick a date - any date will do.

Paragraph 40(d)(12)(xi)

2. Selection of index values. The historical example must reflect the method of choosing index values for the plan. For example, if an average of index values is used in the plan, averages must be used in the example, but if an index value as of a particular date is used, a single index value must be shown. The creditor is required to assume one date (or one period, if an average is used) within a year on which to base the history of index values. The creditor may choose to use index values as of any date or period as long as the index value as of this date or period is used for each year in the example. Only one index value per year need be shown, even if the plan provides for adjustments to the annual percentage rate or payment more than once in a year. In such cases, the creditor can assume that the index rate remained constant for the full year for the purpose of calculating the annual percentage rate and payment.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2228990 - 01/14/20 05:34 PM Re: HELOC Application Disclosure rlcarey
ccman Offline
Platinum Poster
Joined: Sep 2007
Posts: 900
Thanks rl.

Hope everyone at BOL is having a great new year!

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